Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $3.2 billion, reflecting normalized growth of 3% year-over-year [6][20] - Adjusted EBITDA was $263 million, with margins of 8.1%, showing a 40 basis points year-over-year increase [20] - Adjusted diluted earnings per share increased by 6% year-over-year to $0.54 [6][20] Business Line Data and Key Metrics Changes - Digital Solutions segment revenue was $1.34 billion, representing 4% growth, and adjusted EBITDA increased to $103 million with margins of 7.7% [20][21] - Global Engineering Solutions segment 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 [21][22] Market Data and Key Metrics Changes - Amentum 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 [7] - The backlog grew by 4% to over $47 billion, with $23 billion in proposals awaiting award [7][25] Company Strategy and Development Direction - Amentum 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] - The company aims to prioritize higher-margin work and maintain a disciplined capital structure to enable flexible deployment [24][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, citing strong demand signals and robust bookings [19][25] - The impact of the longest government shutdown in history was acknowledged, but management remains optimistic about future performance as operations normalize [6][19] Other Important Information - Amentum's cash position at the end of Q1 was $247 million, with a fully undrawn $850 million revolver [23] - The company received a credit rating upgrade from Moody's, which will reduce interest expenses and enhance financial flexibility [24] Q&A Session Summary Question: Free cash flow progression through the year - Management noted that Q1 cash performance was impacted by timing-related issues, with expectations for strong free cash flow in Q2 [28][30] 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 [34][35] Question: Nuclear business contribution to revenue and profit growth - Management indicated that while nuclear contracts will take time to impact revenue significantly, they expect positive contributions from accelerating growth markets [39][40] Question: Cash flow requirements for joint ventures - Management clarified that the high contributions to equity method investments in Q1 were due to initial capital contributions for joint ventures, which are expected to normalize [46][47] Question: Margin performance in Global Engineering Solutions - Management attributed the improved margins to strategic prioritization of higher-margin work and strong program performance [48][49] Question: Opportunities and challenges with NASA - Management expressed excitement about supporting NASA's goals and highlighted the importance of their role in upcoming missions [82][84]
Amentum Holdings, Inc.(AMTM) - 2026 Q1 - Earnings Call Transcript