Financial Data and Key Metrics Changes - Revenues for Q4 2025 were $1.85 billion, down $223 million year-over-year, primarily due to award timing in MTS and reductions in UCOM contingency scope [20] - Adjusted EBITDA for Q4 increased to $12 million, with margins at 12.6%, up 190 basis points, driven by disciplined program execution [21] - Full-year revenues were approximately $7.8 billion, up modestly year-over-year, with adjusted EBITDA increasing by $100 million and full-year margins at 12.4%, up more than 100 basis points [22][24] Business Line Data and Key Metrics Changes - Sustainable Tech (STS) faced a challenging year with a decline in petrochemicals CapEx, but margins held up well, and the segment delivered strong book-to-bill ratios of 1.6x in Q4 [10][12] - Mission Tech (MTS) revenue held steady year-over-year, with improved margins and excellent cash performance, despite a challenging environment [13][15] - Backlog for MTS ended the year at $19.1 billion, up 15% year-over-year, with 40% funded, excluding PFIs [15] Market Data and Key Metrics Changes - The Global South emerged as a major source of strength for STS, with significant wins in Iraq, Saudi Arabia, Kuwait, and Singapore [11] - MTS saw approximately $800 million in defense award contracts in Australia, with high single-digit year-over-year revenue growth [14] - The U.K. market is expected to see growth following a slow award cadence in 2025, with clear spending priorities established for 2026 [52] Company Strategy and Development Direction - The company executed its strategy in 2025 despite a challenging award environment, focusing on operational excellence and capital deployment [6][10] - The spin-off transaction is progressing as planned, with a targeted distribution anticipated in the second half of 2026 [16][18] - The company aims to enhance its operational clarity and standalone positioning for both entities post-spin [17][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improving momentum and visibility for both segments as they enter 2026, with a focus on high-margin growth and disciplined execution [33] - The company expects award cadence to improve in the second half of 2026, supported by strong bid volume and contract vehicle leverage [15][32] - Management highlighted the importance of innovation and digital differentiation in driving better mix and resilient margins [33] Other Important Information - The company returned a record $413 million to shareholders in 2025 through buybacks and dividends, reflecting strong cash generation [27] - Adjusted EPS for the full year was $3.93, up $0.60 year-over-year, supported by increased adjusted EBITDA and share repurchases [22] - The company plans to introduce adjusted operating cash flow and adjusted free cash flow metrics in 2026 to enhance transparency [29] Q&A Session Summary Question: Pipeline in STS for sizable projects - Management noted impressive book-to-bill performance and significant opportunities in the Global South, particularly in OpEx areas [36][37] Question: Drivers of backlog growth in MTS - Management highlighted recent wins in HHPC and Djibouti, as well as momentum in Space Force and Air Force awards [41][42] Question: Clarity on EBITDA contribution from joint ventures - Management indicated that contributions from Plaquemines will remain consistent through early next year, with a focus on organic and inorganic growth [49][50] Question: Award environment in the U.K. - Management stated that the U.K. is moving into a growth cycle following a flat year, with clear spending priorities established [52] Question: Components of MTS guidance - Management confirmed that Defense and Intel is expected to grow, while Science & Space is under pressure due to NASA budget constraints [55][56] Question: M&A strategy post-spin - Management expressed openness to strategic acquisitions that enhance shareholder value, while maintaining a disciplined approach [60][61]