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]

KBR (KBR) Q2 2025 Earnings Call July 31, 2025 08:30 AM ET Speaker0Good morning. Thank you for attending today's KBR's Second Quarter twenty twenty five Earnings Conference Call. Name is Megan, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the call over to Jamie Dubre, VP of IR with KBR.Please go ahead.Speaker1Thank you. Good morning, and welcome to KBR's second quart ...