Financial Data and Key Metrics Changes - In FY 2025, the company achieved a total revenue growth of 12% and an organic revenue growth of 8%, excluding a confidential contract [4][22] - Adjusted EBITDA expanded by 60 basis points to a record margin of 9.6%, building on a previous expansion of 50 basis points in 2024 [4][24] - Free cash flow conversion reached 100%, exceeding the high end of FY 2025 cash flow guidance [4][22] Business Line Data and Key Metrics Changes - Critical Infrastructure segment reported 10% organic growth, while Federal Solutions segment achieved 7% organic growth, both excluding the confidential contract [4] - In Q4, Critical Infrastructure revenue increased by 12% year-over-year, driven by organic growth of 9% and contributions from recent acquisitions [25] - Federal Solutions segment saw a 9% increase in revenue for Q4, with a 6% organic growth, but total revenue including the confidential contract decreased by 22% [27] Market Data and Key Metrics Changes - The company reported strong demand in both North America and Middle East markets, with double-digit revenue growth in both regions [16][19] - The backlog at the end of Q4 totaled $8.7 billion, with a funded backlog of $6.4 billion, representing the highest level since the IPO [31] Company Strategy and Development Direction - The company aims to achieve mid-single digit or better annual organic revenue growth supplemented by accretive acquisitions, targeting double-digit margins by 2028 [8][32] - The focus remains on integrated solutions to move up the value chain and win larger, more strategic programs [7][19] - The company is well-positioned to capitalize on unprecedented global infrastructure spending and a favorable federal budget environment [18][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a robust pipeline of opportunities and strong total and funded backlog [36][37] - The company anticipates a positive procurement environment in Federal Solutions, with expectations of achieving a book-to-bill ratio over 1.0 in H1 2026 [44][65] Other Important Information - The company completed three acquisitions in FY 2025 and has a strong balance sheet with a net debt leverage ratio of 1.3 times [29][30] - The acquisition of Applied Sciences Consulting and Altamira Technologies Corporation is expected to enhance the company's capabilities and market presence [14][15] Q&A Session Summary Question: Expectations for Critical Infrastructure margins - Management confirmed that legacy adjustments are behind them and expects continued margin expansion in Critical Infrastructure, with a focus on North America [40] Question: Order activity in Federal Solutions post-government shutdown - Management noted a positive trend in order activity and anticipates achieving a book-to-bill ratio over 1.0 in H1 2026 [44] Question: Addressable market for DroneArmor system - Management highlighted the unique capabilities of the DroneArmor solution and its potential applications across various federal departments [50] Question: Demand for mega projects in the Middle East - Management reported ongoing strong demand for major projects in the Middle East, particularly in Saudi Arabia, with a focus on key upcoming global events [54] Question: Federal Solutions revenue guidance adjustments - Management acknowledged previous revenue guidance revisions due to procurement delays and expressed confidence in a positive procurement environment moving forward [64] Question: Margin outlook and potential for upside - Management indicated that while there are headwinds from a confidential program, there are opportunities for margin expansion through product growth and accretive M&A [72]

Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved a total revenue growth of 12% and an organic revenue growth of 8%, excluding a confidential contract [4][24] - Adjusted EBITDA increased by 1% to a record $609 million, with an adjusted EBITDA margin expansion of 60 basis points to 9.6% [25][33] - Free cash flow conversion reached 100%, exceeding the high end of the fiscal year 2025 cash flow guidance range [4][30] Business Line Data and Key Metrics Changes - Critical Infrastructure segment saw a revenue increase of 12% in Q4 2025, driven by 9% organic growth and contributions from recent acquisitions [26] - Federal Solutions segment reported a 9% revenue increase in Q4, excluding the confidential contract, but total revenue decreased by 22% including it [27][29] - For the full year, Critical Infrastructure revenue increased by 15%, while Federal Solutions revenue increased by 9% excluding the confidential contract [26][29] Market Data and Key Metrics Changes - The company reported strong demand in both North America and the Middle East, with double-digit revenue growth in both regions for four consecutive years [17][18] - The funded backlog reached a record $6.4 billion, representing 73% of total backlog, which is also a company record [32] Company Strategy and Development Direction - The company aims for mid-single digit or better annual organic revenue growth supplemented by accretive acquisitions, targeting double-digit adjusted EBITDA margins by 2028 [8][36] - The focus on integrated solutions and strategic contracts is expected to drive long-term shareholder value [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a robust pipeline of opportunities and alignment with government spending priorities [22][37] - The company anticipates challenges from domestic budget uncertainty and a competitive labor market but sees strong tailwinds from global infrastructure spending [34] Other Important Information - The company completed three acquisitions in 2025 and plans to continue strategic acquisitions to enhance its portfolio [5][15] - The company was recognized as the number one program management firm globally and received accolades for its ethical practices and leadership [5] Q&A Session Summary Question: Expectations for Critical Infrastructure margins - Management confirmed that legacy adjustments are behind them and expects continued margin expansion in Critical Infrastructure, with a focus on North America [38] Question: Order activity in Federal Solutions post-government shutdown - Management noted a positive procurement environment and anticipates a book-to-bill ratio over 1.0 for Federal Solutions in the first half of 2026 [39] Question: Addressable market for DroneArmor system - Management highlighted the broad market opportunities for DroneArmor, including potential contracts with the Department of Homeland Security and FAA [40] Question: Demand for mega projects in the Middle East - Management reported ongoing strong demand for major projects in the Middle East, particularly in Saudi Arabia, with a focus on urban development and defense sectors [42][43] Question: Changes in Federal Solutions revenue guidance - Management acknowledged previous downward revisions but expressed confidence in a strong procurement environment moving forward [46] Question: Outlook for FAA customer revenue - Management expects growth from the FAA technical support services contract, which was recently extended [60]

FOURTH QUARTER AND FISCAL YEAR 2025 Earnings Conference Call Presentation FEBRUARY 11, 2025 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Fo ...

Core Insights - Parsons Corporation reported a successful fiscal year 2025 with double-digit revenue growth excluding a confidential contract, record adjusted EBITDA, and strong cash flow performance [4][5] - The company secured 15 contracts valued over $100 million, matching the previous year's record, demonstrating the strength of its diversified portfolio [4][20] Q4 2025 Financial Highlights - Total revenue for Q4 2025 decreased by $131 million, or 8%, to $1.6 billion, with a 10% decline on an organic basis; however, excluding the confidential contract, revenue grew by 11% [5][6] - Operating income increased by 5% to $105 million, while net income rose by 3% to $56 million, with GAAP diluted EPS at $0.51 compared to $0.49 in Q4 2024 [5][6] - Record adjusted EBITDA reached $153 million, a 5% increase year-over-year, with an adjusted EBITDA margin of 9.6% [6][7] Fiscal Year 2025 Highlights - Total revenue for FY 2025 decreased by $386 million, or 6%, to $6.4 billion, with a 9% decline on an organic basis; excluding the confidential contract, revenue grew by 12% [8][9] - Net income for FY 2025 was a record $241 million, with diluted EPS at $2.20, up from $2.12 in FY 2024 [8][9] - Adjusted EBITDA for FY 2025 was a record $609 million, a 1% increase, with an adjusted EBITDA margin of 9.6% [9] Segment Results Critical Infrastructure Segment - Q4 2025 revenue increased by $89 million, or 12%, to $820 million, driven by organic growth of 9% and contributions from recent acquisitions [10][11] - Adjusted EBITDA for Q4 2025 rose by 87% to a record $87 million, with an adjusted EBITDA margin of 10.6% [11] - FY 2025 revenue increased by $400 million, or 15%, to $3.1 billion, with adjusted EBITDA up by 73% to $328 million [12][14] Federal Solutions Segment - Q4 2025 revenue decreased by $219 million, or 22%, to $784 million, with a 24% decline on an organic basis; however, excluding the confidential contract, revenue increased by 9% [15][16] - Adjusted EBITDA for Q4 2025 decreased by 34% to $66 million, with an adjusted EBITDA margin of 8.4% [16] - FY 2025 revenue decreased by $786 million, or 20%, to $3.2 billion, with adjusted EBITDA down by 32% to $281 million [17][18] Key Performance Indicators - Q4 2025 net bookings decreased by 10% to $1.5 billion, with a book-to-bill ratio of 0.9x [19] - FY 2025 net bookings decreased by 9% to $6.4 billion, maintaining a book-to-bill ratio of 1.0x [21] Significant Contract Wins - Parsons secured four contracts worth over $100 million each in Q4 2025, totaling 15 such contracts for the year [20] - Notable contracts include a ten-year $392 million contract for biometrics solutions and a $125 million task order for the U.S. Army [22] Corporate Highlights - The company completed strategic acquisitions, including Altamira Technologies for $375 million, enhancing its capabilities in signals intelligence and space solutions [28] - Parsons received multiple awards for its support of the military community and advancements in space traffic coordination [23][28] Fiscal Year 2026 Guidance - The company projects FY 2026 revenue between $6.5 billion and $6.8 billion, with adjusted EBITDA guidance of $615 million to $675 million [25]

Core Insights - Amentum Holdings reported mixed Q1 2026 earnings, beating earnings per share expectations but missing sales forecasts, leading to a 9.6% drop in stock price [1][2] Financial Performance - The company reported earnings of $0.52 per share on a non-GAAP basis, but the GAAP earnings were $0.18 per share, significantly higher than last year's Q1 profit of $0.05 per share [3] - Sales declined by 5% year-over-year, but operating income improved by 5% due to enhanced profit margins, resulting in a 260% increase in profits per diluted share [2][3] - Free cash flow was negative, with Amentum burning $142 million in cash during the quarter [3] Future Outlook - Amentum forecasts a return to sales growth later in the year, projecting full-year sales could reach $14.3 billion, representing a 3% year-over-year growth [4] - Adjusted earnings are expected to grow by approximately 12% to $2.35 per share, with free cash flow anticipated to be around $550 million, also reflecting 12% growth [4] Valuation - The company's enterprise value stands at $12.6 billion, implying a 23x EV-to-FCF ratio, which is considered high given the projected 12% growth [5]

Financial Data and Key Metrics Changes - Revenue for the quarter was $3.2 billion, reflecting normalized growth of 3% year-over-year [7][20] - Adjusted EBITDA was $263 million, with margins of 8.1%, a 40 basis points increase year-over-year [20] - Adjusted diluted earnings per share increased by 6% to $0.54 [7][20] Business Line Data and Key Metrics Changes - Digital Solutions revenue was $1.34 billion, representing 4% growth, and adjusted EBITDA increased to $103 million with margins of 7.7% [20] - Global Engineering Solutions revenue was $1.9 billion, with adjusted EBITDA of $160 million and margins of 8.4%, reflecting an 80 basis points year-over-year increase [20] Market Data and Key Metrics Changes - The company reported $3.3 billion in net bookings, resulting in a book-to-bill ratio of 1x for the quarter and 1.1x for the last 12 months [8] - The backlog grew by 4% to over $47 billion, with $23 billion in proposals awaiting award [8] Company Strategy and Development Direction - The company is focused on three accelerating growth markets: space systems and technologies, critical digital infrastructure, and global nuclear energy, which are expected to drive long-term growth [12][14] - Amentum aims to prioritize higher-margin work and has seen significant contract wins in the nuclear energy sector, including a $730 million contract with EDF Energy [10][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving fiscal year 2026 outlook and long-term strategic growth objectives despite challenges from the government shutdown [5][16] - The company anticipates strong free cash flow in the second quarter and remains confident in meeting full-year guidance [22][24] Other Important Information - The company has a healthy liquidity position with $247 million in cash and an undrawn $850 million revolver [22] - A recent credit rating upgrade from Moody's is expected to reduce interest expenses and enhance financial flexibility [23] Q&A Session Summary Question: Free cash flow progression through the year - Management noted that Q1 cash performance was impacted by timing-related issues, including an additional pay cycle and government holiday closures, but expects strong free cash flow in the second quarter [28][29] Question: Award outlook by end market - Management highlighted an uptick in funded backlog and expressed confidence in achieving a full-year book-to-bill greater than one, with significant awards expected from accelerating growth markets [32][34] Question: Nuclear business contribution to revenue and profit growth - Management indicated that while nuclear represents a smaller portion of overall revenue, recent contract awards are expected to positively impact margins over time [38][39] Question: Cash flow requirements for joint ventures - Management explained that the large contributions to equity method investments in Q1 were due to initial capital contributions for joint ventures, which are not expected to continue at that level [45] Question: Margin performance in Global Engineering Solutions - Management attributed the improved margins to strategic prioritization of higher-margin work and strong program performance, while also acknowledging the impact of government shutdown timing [46][47] Question: Opportunities and challenges in NASA contracts - Management expressed excitement about supporting NASA's Artemis II mission and emphasized alignment with new leadership's focus on successful mission delivery and cost constraints [81][83]

Financial Performance - Revenue for the quarter was $3.2 billion, reflecting normalized growth of 3% year-over-year [7][20] - Adjusted EBITDA was $263 million, with margins of 8.1%, representing a 40 basis points year-over-year increase [20] - Adjusted diluted earnings per share increased by 6% year-over-year to $0.54 [20] Business Line Performance - Digital Solutions segment generated revenue of $1.34 billion, a 4% increase, with adjusted EBITDA of $103 million and margins of 7.7% [20] - Global Engineering Solutions reported revenue of $1.9 billion, with adjusted EBITDA of $160 million and margins of 8.4% [20] Market Performance - The company secured $3.3 billion in net bookings, resulting in a book-to-bill ratio of 1x for the quarter and 1.1x for the last 12 months [8] - The backlog grew by 4% to over $47 billion, with $23 billion in proposals awaiting award [8] Company Strategy and Industry Competition - Amentum is focused on three accelerating growth markets: space systems and technologies, critical digital infrastructure, and global nuclear energy [12] - The company aims to prioritize higher-margin work and has seen robust demand in nuclear energy, with nearly $1 billion in awards in the first quarter [9][39] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving fiscal year 2026 outlook and long-term strategic growth objectives despite challenges from the government shutdown [5][16] - The company anticipates strong free cash flow in the second quarter and reaffirms full-year guidance for revenue and adjusted EBITDA [24][25] Other Important Information - The company has a healthy liquidity position with $247 million in cash and an undrawn $850 million revolver [22] - Amentum received a credit rating upgrade from Moody's, reducing interest expenses and enhancing financial flexibility [23] Q&A Session Summary Question: Free cash flow progression and potential receivables sales - Management noted that Q1 cash performance was impacted by timing-related factors, with expectations for strong free cash flow in the second quarter [28][29] Question: Award outlook by end market - Management highlighted an increase in funded backlog and expressed confidence in achieving a full-year book-to-bill greater than one [33][34] Question: Nuclear business impact on revenue and profit growth - Management indicated that while nuclear contracts will take time to significantly impact quarterly results, they expect positive contributions on a year-over-year basis [38][39] Question: Impact of joint ventures on cash flow - Management clarified that the large contributions to equity method investments in Q1 were due to initial capital contributions for joint ventures, which are expected to normalize [45] Question: Opportunities and challenges in NASA contracts - Management expressed excitement about supporting NASA's Artemis II mission and emphasized alignment with new leadership's goals for cost and schedule efficiency [81][84]

Core Thesis - KBR, Inc. is viewed positively due to its upcoming spin-off of the Mission Technology Solutions (MTS) segment, which is expected to unlock significant value for shareholders [1][5] Company Overview - KBR, Inc. provides scientific, technology, and engineering solutions to both government and commercial clients globally [2] - The company's stock has declined approximately 26% over the past year, currently trading at a discount ahead of the planned spin-off in the second half of 2026 [2] Financial Metrics - As of February 4th, KBR's share price was $42.64, with trailing and forward P/E ratios of 13.05 and 10.28 respectively [1] - KBR trades at about 12 times earnings and 8 times EBITDA, significantly lower than comparable government contractors, which typically have mid-to-high teens earnings multiples [2] Segment Analysis - The MTS segment has faced challenges, including the loss of the TRANSCOM contract, but the impact on earnings and cash flow has been limited, with backlog trends stabilizing [3] - The Sustainable Technology Solutions (STS) segment is highlighted as the company's core asset, generating double-digit revenue growth and over 20% EBITDA margins with low capital intensity [4] Valuation Insights - A sum-of-the-parts analysis indicates that the separation of MTS and STS could reveal substantial value, with an implied equity value suggesting approximately 30% upside [5] - The valuation discount is expected to diminish as the spin-off approaches, presenting an attractive risk-reward scenario for investors [5]

Core Insights - Jacobs Solutions Inc. has secured a significant contract to lead the engineering design of the Bolivar Roads Gate System, a major coastal storm surge barrier along the Texas Gulf Coast [1][9] - The project is part of the Coastal Texas Project, aimed at enhancing regional protection against hurricanes and flooding, and is expected to be one of the largest storm surge barrier systems globally [2][4] Project Overview - The Bolivar Roads Gate System will act as a protective barrier at the entrance between the Gulf of Mexico and Galveston Bay, safeguarding over six million residents and approximately $800 billion in infrastructure and property [4][5] - This initiative is described as a "generational investment" that aims to bolster coastal resilience and support uninterrupted commercial activity while incorporating advanced monitoring tools for long-term reliability [5][6] Strategic Importance - The Coastal Texas Project represents a collaboration between the Gulf Coast Protection District, the U.S. Army Corps of Engineers, and the Texas General Land Office, marking a significant effort in U.S. coastal resiliency history [6] - The project is backed by nearly $1 billion in initial state funding and is designed to limit storm surge while allowing maritime traffic to continue, thereby reducing storm-related damage costs and preserving coastal ecosystems [6] Financial Performance - Jacobs reported a record consolidated backlog of approximately $26.3 billion in the first quarter of fiscal 2026, reflecting a 21% year-over-year increase, driven by strong program wins across various sectors [7] - The company has secured notable project awards in key growth markets, including a $1.6 billion modernization project for Cleveland Hopkins International Airport, which supports its backlog growth and long-term revenue visibility [8] Market Reaction - Following the announcement of the contract, Jacobs' shares increased by 7.8% during the trading session, indicating positive market sentiment regarding the company's growth prospects [3][9]

Core Viewpoint - Jacobs has been selected to manage the construction of the San Dieguito Lagoon Double Track and Special Events Platform project, which aims to enhance rail capacity and reduce congestion along the LOSSAN Corridor, a vital rail link in Southern California [1][2]. Group 1: Project Details - The project involves 2.1 miles of track improvements, including a new double track to eliminate a bottleneck between Solana Beach and Del Mar fairgrounds, aimed at easing traffic congestion and improving access during large-scale events [2]. - Additional upgrades include the replacement of the century-old San Dieguito Lagoon bridge to improve climate resiliency, along with enhancements to turnouts, signals, communications, and drainage systems to boost operational efficiency [3]. Group 2: Company Overview - Jacobs is ranked No. 2 in Transportation by Engineering News-Record and is involved in moving people, goods, and freight through various modes of transport [4]. - The company generates approximately $12 billion in annual revenue and employs nearly 43,000 people, providing end-to-end services across multiple sectors including transportation, energy, and environmental services [5].