Financial Data and Key Metrics - Full-year revenue for fiscal 2024 was 1.05 billion, reflecting a 7% year-over-year increase, driven by a 20-basis-point margin improvement [17] - Ending backlog for fiscal 2024 was 12 billion, highlighting strong end-market demand [17] - Pro forma book-to-bill ratio was 0.8x, excluding the Hanford contract and 45 billion, 10-year contract for the Hanford Integrated Tank Disposition Contract, showcasing its expertise in environmental and energy solutions [19] - Amentum was awarded a task order to deliver microelectronics capabilities to the U.S. Navy, emphasizing its focus on cutting-edge RDT&E programs [18] - The company secured a position on the UK's Hypersonic Technologies and Capabilities Development Framework, leveraging its digital engineering solutions [20] - Commercial contracts exceeded 1 billion in fiscal 2024, supporting Fortune 500 customers in areas like advanced product R&D, next-gen wireless networks, and clean energy solutions [21] Market Performance - The company has a diversified customer base, with 80% of revenue from the U.S. government and 20% from international and commercial markets [28] - Amentum is well-positioned in defense, intelligence, and space markets, aligning with national security priorities [28] - The company sees growth opportunities in the energy transition and digital modernization, supported by its multi-disciplinary engineering centers of excellence [22] Strategic Direction and Industry Competition - The merger with Jacobs' Critical Mission Solutions and Cyber and Intelligence units has created a more diversified company capable of tackling complex global challenges [14] - Amentum is leveraging its combined capabilities to expand into new markets, including clean energy, nuclear, and international growth opportunities like AUKUS [23][24] - The company is focusing on digital solutions and global engineering solutions as key growth areas, with plans to report these as separate segments starting in fiscal 2025 [45] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in navigating potential changes under the new administration, citing Amentum's strong backlog and diversified customer base [32] - The company expects to submit over 35 billion in bids in fiscal 2025, with a robust pipeline supporting future growth objectives [38] - Amentum is targeting a net leverage ratio of approximately 3x by the end of fiscal 2026, supported by strong free cash flow and operational efficiencies [39][44] Other Important Information - The company introduced adjusted net income and adjusted diluted EPS metrics for fiscal 2025, with expectations of 2.20 per share [43] - Free cash flow guidance for fiscal 2025 is projected to be between 525 million, supported by a capital-light business model [44] - The company expects quarterly sequential increases in all metrics through fiscal 2025, driven by new program ramp-ups and a 53rd week in the fourth quarter [44] Q&A Session Summary Question: Impact of DOGE and CR timeline - Amentum has limited exposure to civilian agencies, with most of its U.S. government work focused on national security, which is less likely to face budget pressure [52][53] - The company expects the continuing resolution (CR) to extend into February or April 2025 [55] Question: Post-merger learnings and leverage reduction - The merger has strengthened Amentum's market position, with opportunities to accelerate digital capabilities and expand into new markets like clean energy and international growth [59][60] - The company is committed to reducing leverage to 3x by fiscal 2026, with potential acceleration through improved working capital and higher EBITDA performance [66][67] Question: Nuclear and AI opportunities - Amentum is well-positioned in the nuclear and clean energy sectors, with significant growth opportunities in small modular reactors (SMRs) and environmental remediation [73][76] - The company is leveraging AI across multiple sectors, including defense, intelligence, and commercial applications, with a focus on real-time threat detection and predictive analytics [78][80] Question: Guidance assumptions and new business - Amentum's fiscal 2025 guidance assumes 8% of revenue from new business, with a well-diversified set of opportunities aligned with critical national and international priorities [85] - The company has $23 billion in submitted bids awaiting decision, with 80% representing new business [94] Question: Hanford contract and backlog - The Hanford contract is not included in backlog due to its joint venture structure, but its earnings contributions are reflected in the company's financial outlook [91] Question: Intelligence market growth - The merger has significantly expanded Amentum's intelligence market footprint, with opportunities to pursue larger enterprise contracts and expand its pipeline in the intelligence community [100][102] Question: Seasonality and geopolitical exposure - Amentum expects stronger performance in the second half of fiscal 2025, with normal seasonality in cash flow driven by government fiscal year-end collections [107][109] - The company has minimal exposure to geopolitical conflicts, with no significant contracts tied to Ukraine or the Middle East [115][116]
Amentum Holdings, Inc.(AMTM) - 2024 Q4 - Earnings Call Transcript