Financial Data and Key Metrics Changes - Revenue increased to $14.4 billion, representing pro forma growth of 4% [11] - Adjusted EBITDA reached $1.1 billion, an increase of 5% year over year [11] - Adjusted diluted earnings per share rose to $2.22, up 11% [11] - Free cash flow totaled $516 million, supporting debt reduction objectives and bringing net leverage to 3.2 times [11][28] Business Line Data and Key Metrics Changes - Digital Solutions generated revenues of $1.5 billion for the quarter and $5.5 billion for the year, representing 11% and 7% growth respectively [26] - Global Engineering Solutions reported revenues of $2.4 billion for the quarter and $8.9 billion for the year, showing 9% and 2% growth respectively [27] Market Data and Key Metrics Changes - The company submitted $35 billion in bids, achieving a full-year book-to-bill ratio of 1.2 times and a quarterly ratio of 1.6 times [12] - Backlog grew 5%, reaching over $47 billion, with $20 billion in proposals awaiting awards [12] Company Strategy and Development Direction - Amentum aims to integrate and deliver advanced engineering and technology solutions across key markets, including defense, nuclear energy, intelligence, and space [6][10] - The company is focusing on core growth areas such as RDT&E, intelligence operations, and environmental remediation, while also targeting accelerating growth markets like space systems and digital infrastructure [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to adapt to changing customer priorities and government spending dynamics [15][23] - The outlook for fiscal year 2026 includes expected revenues in the range of $13.95 to $14.3 billion, with adjusted EBITDA projected between $1.1 to $1.14 billion [29][31] Other Important Information - The company has exited all transition service agreements and is on track to deliver at least $60 million in net run rate synergies by the end of fiscal year 2026 [10] - Amentum's diverse portfolio, with 20% of revenue tied to commercial and international work, provides insulation from sector volatility [15] Q&A Session Summary Question: Discussion on timing or one-time margin and cash flow dynamics in the quarter - Management noted that additional working days contributed approximately $20 million to cash flow, and they expect a strong cash flow trajectory with 12% growth in FY26 [34][35] Question: Multi-year margin progression and synergy targets - The company aims for 8.5 to 9% margins by FY28, with a target of exceeding $60 million in net run rate cost synergies by the end of FY26 [36][39] Question: Update on nuclear opportunities and growth areas - Amentum plays a critical role across the entire nuclear energy life cycle, with 17% of its business currently in this sector, and anticipates significant growth driven by demand for electricity and AI [58][59] Question: Timing and magnitude of potential divestitures and upcoming awards - Management expressed excitement about the current portfolio and indicated that they are evaluating growth opportunities while remaining committed to maximizing free cash flow per share [50][52]
Amentum Holdings, Inc.(AMTM) - 2025 Q4 - Earnings Call Transcript