AMTM

Image source: The Motley Fool. Tuesday, Aug. 11, 2026 at 8:30 a.m. ET Senior Vice President of Investor Relations-Joseph DeNardi Chief Executive Officer-John Heller Chief Financial Officer-Travis Johnson Chief Operating Officer-Steve Arnette Operator: Ladies and gentlemen, thank you for standing by. Good morning, and welcome to Amentum's Third Quarter Fiscal Year 2026 Earnings Conference Call. Today's call is being recorded. [Operator Instructions] I would like to turn the call over to Joe DeNardi, Senior Vice President of Investor Relations. Please go ahead. Joseph DeNardi: Thank you, and good morning, everyone. We hope you've had an opportunity to read our earnings release, which we issued yesterday afternoon and is posted on our Investor Relations website. We have also provided presentation slides to facilitate today's call. So let's move to Slide 2. Please note that this morning's discussion will contain forward-looking statements that are subject to important factors that could cause actual results to differ materially from anticipated. I refer you to our SEC filings for a discussion of these factors, including the Risk Factors section of our annual report on Form 10-K. The statements represent our views as of today, and subsequent events may cause our views to change. We may elect to update the forward-looking statements at some point in the future, but specifically disclaim any obligation to do so, except as required by applicable law. In addition, we will discuss non-GAAP financial measures, which we believe provide useful information for investors. Both our earnings release and supplemental presentation slides include reconciliations to the most comparable GAAP measures. We do not provide reconciliations of forward-looking non-GAAP financial measures due to the inherent difficulty in forecasting and quantifying certain significant items. These non-GAAP financial measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Our safe harbor statement included on this slide should be incorporated as part of any transcript of this call. With me today to discuss our business and financial results are John Heller, Chief Executive Officer; and Travis Johnson, Chief Financial Officer. We are also joined by other members of management, including Steve Arnette, Chief Operating Officer. With that, moving to Slide 3, it's my pleasure to turn the call over to our CEO, John Heller. John Heller: Thank you, Joe, and thank you, everyone, for joining us today. I'll begin with a discussion of our third quarter results and updated outlook, followed by a review of our business development performance and how we're executing our strategy to create long-term value. I'll then turn to a review of our core growth areas before closing with an update on recent key developments in nuclear energy, which provides substantive proof points supporting our strategy and transformational opportunity in this market. Now let's turn to our third quarter performance. Although revenue came in slightly below our expectations, strong operating performance enabled higher-than-anticipated profitability and cash. Notable highlights include revenue of $3.5 billion, reflecting normalized growth of approximately 1%, adjusted EBITDA of $290 million with strong margins of 8.3%, adjusted diluted earnings per share of $0.67, up 20% year-over-year and free cash flow of $135 million. As Travis will discuss in greater detail, we are revising our fiscal year '26 guidance to reflect near-term revenue dynamics and to incorporate our strong year-to-date performance that increases our expectations for adjusted EBITDA and adjusted diluted earnings per share. Turning to Slide 4 in our business development results, we delivered another quarter of solid execution. Net bookings of $3.9 billion resulted in a quarterly book-to-bill of 1.1x and trailing 12 months of 1.3x, and ending backlog of $48 billion. Funded backlog increased 10% year-over-year to $6.2 billion. Our key leading indicators remain strong with pending awards of $32 billion, including 2/3 new business to Amentum as well as $2 billion of new work already won under protest. We also remain on track to exceed our full year submits target of $35 billion, of which more than half is new business. With that, let me highlight a few notable third quarter awards. Starting in nuclear, we had bookings from multiple commercial customers that totaled over $400 million to provide solutions supporting the initial engineering, development and design of advanced nuclear technologies. Second, we received $250 million in awards across several contracts within our critical digital infrastructure market, including key wins supporting hyperscaler data center build-outs and additional tasking in commercial network infrastructure. Within national security, we were awarded over $1 billion to provide engineering, logistics and modernization solutions to U.S. and international defense customers. And in Space Systems and Technologies, we booked 2 long-term NASA IDIQ awards, which were previously under protest, including COSMOS, which supports flight mission operations and CMOE, where Amentum provides research, engineering and modernization for advanced aeronautics development. Turning to Slide 5. We remain well positioned for long-term growth and are demonstrating clear and tangible progress as indicated by continued business development momentum across the portfolio, but particularly in key markets, including global nuclear energy and critical digital infrastructure. While near-term growth is impacted by extended protest periods in certain instances of procurement delays, we believe that the underlying drivers of demand, including a well-supported Department of [ Board ] budget outlook, clearly point to an eventual strengthening of revenue trends. As we indicated last quarter, we are working with NASA to implement the agency's workforce directive. This initiative looks to in-source certain elements of the workforce currently provided by industry with the intention of upgrading scientific and engineering expertise within the agency. Based on conversations with our customers at NASA in recent weeks and months, we now anticipate a 3% impact to revenue in fiscal year '27. This is higher than the potential impact we shared on our second quarter call as the scope of in-sourcing is now assumed to be at the upper bound of prior possible scenarios. Given the margin profile of this business, we expect the impact to adjusted EBITDA to be less than that to revenue and therefore, accretive to overall margins. In the interim, our focus is on mitigating the revenue impacts from NASA with strong program execution and continuing to grow the margin-accretive areas of our portfolio at a faster rate. This approach and the resiliency of our business model will drive strong earnings and free cash flow growth, which we will deploy in a disciplined manner to further enhance long-term shareholder value. Now let's turn to Slide 6. In prior quarters, I have focused on 3 accelerating growth markets: nuclear energy, digital and space, which combined account for just over $4 billion in annual revenue. Today, I'll cover our core growth areas that are outlined on Slide 7, which represents the remaining $10 billion of revenue. We operate in 3 primary markets with the majority of revenue coming from national security, followed by environmental remediation and homeland security. Across all 3, Amentum benefits from deep customer relationships spanning several decades of past performance and credibility, supporting critical customer missions. We see alignment with key drivers of growth across the portfolio, including increased defense spending in the U.S. and among our key allies, securing the border and protecting the homeland and providing solutions to support the U.S. and international customers' management of legacy nuclear projects. Moving to Slide 8. Let me provide an update on the recent strategic progress we've made in nuclear, including key recent developments and program wins. As previously discussed, total nuclear revenue across Amentum is $2 billion, of which approximately $0.5 billion is in our global nuclear energy accelerating growth market, where we provide solutions to design, develop and program manage new build nuclear capacity across the globe. Importantly, our rich legacy in the remediation market provides a level of expertise, customer access and a deep talent pool, which enable the success we are having in global nuclear energy. We continue to see momentum as evidenced by a few key recent developments. First, our position as global delivery partner to Rolls-Royce continues to gain momentum as they were selected for small modular reactor deployments in Sweden, and signed contracts to move forward on previously announced awards in the U.K. and Czech Republic. We continue to see a rich pipeline ahead and are proud to support Rolls-Royce in the deployment of nuclear capacity around the world. Second, we announced a strategic partnership with Westinghouse, under which Amentum will support engineering and commercial deployment of Westinghouse's APX platform, including its AP1000 gigawatt reactor and AP300 SMR. This expands upon Amentum's existing strategic relationship with Westinghouse from engineering support into a long-term strategic alliance covering wider nuclear technology opportunities. Lastly, Amentum was selected by the Department of Energy to lead development of an AI data center and energy infrastructure project at the Savannah River Site. Under this initiative, Amentum will lead a broad consortium to develop, design, build and operate a multi-gigawatt nuclear facility in AI data centers. While the financial framework is still being negotiated between the consortium and the Department of Energy, we would expect the economics to Amentum to be generally consistent with a 2-gigawatt nuclear project with revenue in excess of $1 billion over the life of the project. In addition, given our role as lead integrator, we expect to have options for economic interest in the eventual commercial operations of the facility, including the monetization of tokens for the data centers and electrons from the nuclear facility. This opportunity is a clear revenue synergy with our merger and could not have been won without the global reach, capabilities and customer access of the combined entity. We are excited about the long-term potential of the program, but also the short-term synergies it contributes to our broader nuclear strategy. As we show on the slide, our expectation for growth in global nuclear reflects a combination of key contracts and partnerships already secured as well as opportunities in our pipeline that we are closely tracking with expected progress in the coming quarters and years. It also reflects the revenue profile typical in this market where project scope focus in the first few years is on planning, design and engineering, which yields low tens of millions of dollars in annual revenue before transitioning into construction with annual revenue several multiples higher. While forecasting the exact timing of financial impacts on certain nuclear opportunities is difficult given the long-term nature of these projects, it is clear that Amentum will have a leading position as the U.S. invests to redevelop its nuclear energy capability as a national security priority and to ensure the country's leadership in the deployment of artificial intelligence and critical energy availability. We believe the developments announced in the quarter and those in our pipeline are clear evidence that Amentum will play a key role enabling the deployment of nuclear energy capacity in the U.S. and globally. In summary, while we recognize near-term revenue trends are below our prior expectations, our strategic progress and continued business development momentum reinforce our confidence in the long-term trajectory of the business. We remain focused on delivering profitable growth, strong cash flow and continued value creation for our shareholders. With that, I'll now turn the call over to Travis. Travis Johnson: Thank you, John, and good morning, everyone. I'll now discuss Amentum's third quarter financial results, which demonstrate continued strong operational performance, improving profitability and solid cash generation. I'll also review our capital structure highlights as well as our updated fiscal year '26 guidance and preliminary expectations for fiscal year '27. With that, let's begin with an overview of our financial performance on Slide 9. As John mentioned, third quarter revenue totaled $3.5 billion and came in slightly below our expectations as a result of the impact from protest delays and low-margin material volume. Normalized year-over-year growth of 1% was driven by the ramp-up of new contract awards and on-contract growth, which more than offset the expected continued wind down of certain legacy programs. Adjusted EBITDA increased to $290 million, up 6% from the prior year quarter and reflects record quarterly adjusted EBITDA margins of 8.3%, a 60 basis point year-over-year increase. The strong margin performance was enabled by continued progress on our margin expansion strategy, including a favorable mix shift and strong operational performance. Adjusted diluted earnings per share of $0.67 increased 20% year-over-year, reflecting continued strong operational performance as well as lower interest expense from almost $700 million in debt repayments over the last 12 months and a lower cost of debt enabled by our successful refinancing in April. Moving to our reportable segment results on Slide 10. Digital Solutions delivered revenue of $1.5 billion, representing 3% growth, driven by the continued ramp-up of new contract awards in our digital infrastructure and space markets. Adjusted EBITDA increased to $116 million due to the higher revenue volume, resulting in adjusted EBITDA margins of 8%, consistent with the prior year and up 80 basis points from the second quarter. Turning to Global Engineering Solutions. Revenue was $2 billion, reflecting impacts from JV transitions, a divestiture and the expected ramp down of certain historical programs, all of which were partially offset by contributions from new contract awards and on-contract growth. Adjusted EBITDA of $174 million benefited from 110 basis points year-over-year increase in adjusted EBITDA margin to 8.6%. This strong performance in the quarter was driven by a continued focus on higher-margin growth opportunities, favorable contract mix and disciplined program execution. Now turning to Slide 11 to cover our cash flow and capital structure highlights. Free cash flow in the third quarter and year-to-date totaled $135 million and $213 million, respectively, which is in line with our expectations and reflects strong cash earnings and our disciplined approach to working capital management. This performance enabled debt repayments of $125 million during the quarter and reduced our net leverage to 3x at quarter end, reaching an important milestone we set at Capital Markets Day 1 quarter earlier than expected. We remain on track to achieve net leverage less than 3x in the fourth quarter, which positions us well to be more flexible and opportunistic with capital deployment and our approach will remain focused on allocating capital toward the highest long-term returns. Now turning to Slide 12 and our fiscal year '26 full year outlook. Based on year-to-date performance and our current visibility into the fourth quarter, we are updating our fiscal year '26 guidance. We now expect revenue between $13.8 billion and $13.95 billion, with reduced contributions from new business awards under protests and our latest expectations on materials and nonlabor volume. The midpoint reflects normalized revenue growth of approximately 2% in the fourth quarter, which is consistent with our performance year-to-date after adjusting for the impact of the government shutdown in Q1. As a result of our strong year-to-date performance, we are raising our outlook for adjusted EBITDA to between $1.115 billion and $1.14 billion, reflecting adjusted EBITDA margins of 8.1% at the midpoint, a 20 basis point improvement from our prior guidance and a 40 basis point increase from fiscal year '25 actuals. We are also increasing guidance for adjusted diluted earnings per share to a range of $2.40 to $2.50, given the strong year-to-date operational performance and interest expense benefits from our debt refinancing. And finally, we are maintaining our free cash flow guidance between $525 million and $575 million. As a reminder, fourth quarter cash flow will benefit from seasonally strong collections and 1 fewer pay cycle relative to the prior year quarter. Looking ahead, let's turn to Slide 13 to discuss our preliminary views for fiscal year '27. From a revenue perspective, as John indicated, we now expect a 3% impact from NASA's workforce directive. In addition, consistent with our commitment to allocate resources to higher return opportunities, we have made an intentional decision to exit a few no to low-margin programs, notably in domestic-based operations that total approximately 1% of revenue. At the same time, given our continuing business development momentum, we expect mid-single-digit growth in the remaining portfolio, more than offsetting the impacts from NASA and the exit of low-margin work. Looking at adjusted EBITDA, given the relative profile of our NASA portfolio, we expect the impact will be accretive to overall margins. After taking into consideration some investments we are making to drive long-term growth, particularly in nuclear and digital infrastructure as well as a favorable mix shift and other operational improvements, we expect a 20 basis point year-over-year increase in margins. Given our strong execution to date and further benefits of mix as higher-margin areas of our portfolio continue to grow faster, I'm confident in our ability to drive sustained margin improvement in the years ahead. Finally, we expect continued strong earnings per share and free cash flow growth as a result of the increased profitability and reductions to both integration and interest expense. In closing, our focus as a management team remains on execution, prudent investments to support long-term growth in our strongest markets and deploying capital to maximize long-term return on investment. We have conviction that our ability to deliver on these areas of focus will translate over time into significant value for our shareholders. With that, operator, please open the line for questions. Operator: [Operator Instructions] Your first question comes from the line of Tobey Sommer with Truist. Tobey Sommer: I wanted to start out, if I could, looking forward as your commitment to delever to a reasonable range that comes to a conclusion, how are you planning to deploy your capital as you look into the following fiscal year? Travis Johnson: Tobey, Travis here. Well, thanks for your question. Obviously, we're pleased with the progress we've been able to make to date as it relates to our deleveraging objectives. The cash flow performance in the quarter allowed us to get to net leverage of 3x at the end of the quarter, which, as you know, is 1 quarter earlier than we expected when we set that goal back at Capital Markets Day. So really pleased with the progress. As you can imagine, we've been preparing in recent months to be ready as our capital opportunities broaden for deployment. And that obviously includes working internally and with our Board on the various strategic options, including M&A, share repurchases and continued debt reduction. So in terms of how we deploy the capital, as stated in our prepared remarks, it should and will be determined based on what presents the best long-term return for Amentum and our shareholders. So that obviously requires we be realistic and disciplined about both Amentum's risks and opportunities, but also about those of the companies we would look to potentially acquire from an M&A perspective. And I say it also should require that we take a responsive look at where stock price and valuation are and taking a look at things like intrinsic value and making sure that we're obviously, taking that into consideration as we make those decisions. So as appropriate and as we move throughout the year, we'll continue to keep you guys updated. But just keep in mind, our approach will focus on maximizing free cash flow per share and driving long-term shareholder value. John Heller: And what I would add to that, Tobey, it's John. Thanks for the call. We're making great progress in -- across our portfolio from a business development standpoint, the numbers we talked about today, the volume of bids, our success in nuclear energy and the partnerships we're getting, all organic. So I think what we're showing is the enterprise of Amentum has the ability to go to market in our core growth areas today with the organic investments we're making does not require transformational M&A. That doesn't say that M&A couldn't be part of our strategy, but I think the point would be that we're very comfortable with the capabilities we have to compete and win in areas that can drive higher margin and growth. Tobey Sommer: And I was wondering if you could -- it might be early, I know, but you gave a preliminary look at fiscal -- the next fiscal year. Do you think -- do you expect top line organic growth in the fiscal year after that? And I know it's far away, so not an official guide or anything like that complete, but any kind of color you could provide would be helpful. Travis Johnson: Yes. So as you can appreciate, a fair bit has changed over the last 24 months, especially as it relates to dynamics that are impacting our near-term revenue situation, obviously, as we covered in the prepared remarks, NASA headed into next year, which, as you would expect, we hadn't originally contemplated. But at the same time, our performance this year, I think, demonstrates our ability to mitigate the impact of lower revenue on both EBITDA and free cash flow and the preliminary outlook we provided for '27 has that trend continuing. And then directly at your question, looking ahead, as John really highlighted in his prepared remarks and obviously in response to your prior question, we're really pleased with the business development momentum and we continue to see attractive opportunities across the portfolio with particular momentum in nuclear energy and critical digital infrastructure. And at the same time, we're also making progress across our technology-enabled businesses where our differentiated capabilities across engineering, digital, space, national security, we see really aligning well with emerging customer priorities and long-term investment. So altogether, when you look at the portfolio next year, aside from the impact we're seeing from NASA, it's growing at that mid-single-digit rate. And we're really excited about the trajectory and what that means for momentum in the medium and long term. John Heller: And we're really just keeping our heads down on our strategy, and it's working. The combination of business development momentum, we're seeing margin expansion. We're generating very strong free cash flow. If you look at LTM book-to-bill 1.3 this past quarter, 1.1 book-to-bill. We said we're going to bid over $35 billion this year. We've already done that, which means even with several months to go in the year, we've already exceeded what we did last year. So the things that are happening in the strategy and the tactical execution of the team is working, and we feel very comfortable on how we're managing the business and where it's going to go from here. Operator: Your next question comes from the line of Seth Seifman with JPMorgan. Christopher Barbero: This is Rocco on for Seth. Kind of building on the second question there, looking at the preliminary color on 2027, how should we think about the split between DS and GES? GES has seen some not great growth in '26 so far, while DS has posted strong growth even with the Rapid Solutions divestiture. Should we be expecting that trend to continue next year? Stephen Arnette: Yes. Obviously, it's a little bit early to get into any segment-specific guidance. But what I would say at a macro level is from an underlying perspective, obviously, NASA, which is in our Digital Solutions segment will put some pressure on the growth in that segment. But setting that aside, we do see organic growth opportunities across both segments for next year as well as EBITDA margin expansion opportunities across both segments. Christopher Barbero: Great. And then how should we be thinking about Amentum's involvement in U.S. allied nuclear power programs? For example, the reported agreement with Saudi Arabia. Would this be an opportunity for Amentum? And are there any other kind of big international opportunities to call out here? John Heller: Well, we have a strong pipeline of opportunities that we're working globally. We certainly see opportunities in countries like Saudi Arabia is open to Amentum with our brand, global brand. We definitely get inbounds and understand where growth is going to happen in the near term. And we are very active. Obviously, we've been involved in 17 nuclear power plant construction projects in the U.K. We have a great brand in Europe, working in various countries across Europe now with our Rolls-Royce partnership. So we're very well established in the European continent and the nuclear energy space. And we would see and are tracking opportunities globally in our pipeline that could provide opportunities for growth in the near term. Operator: Your next question comes from the line of Colin Canfield with Cantor Fitzgerald. Colin Canfield: For '27 growth outlook or preliminary growth outlook, can you just talk about how much of that revenue outlook is covered by both your backlog today as well as your expected pending awards over, call it, the next 6 to 12 months? And then if -- I know you didn't want to go into segment detail, but maybe talk about like just the level of on-contract growth that you're assuming as part of that number. Stephen Arnette: So this is a few months earlier, obviously, than we provide outlooks in the prior years. But what I would say from how we see the year shaping up from a sources of revenue perspective, as we sit here today, we expect approximately 92% of the revenue in FY '27 to come from existing or follow-on work. So that's a really good place to be in terms of a level of visibility this early, right? FY '26 isn't over yet, right? So we still got a few months to go in terms of the $32 billion of pending awards that John mentioned and seeing how those get adjudicated in the coming months will obviously have an impact on FY '27. But we feel really good about the visibility we have as we sit here today, and we'll continue to keep you updated as we move throughout the year. John Heller: Yes, I'd just call out that we did mention that there have been factors that have impacted the revenue like the firm fixed price executive order that has created kind of slowdown reconsideration of some new business. So we've seen some new business delays, award delays because of that, which we deem is very positive. The opportunity to do more fixed price work, and we are seeing that shift happen in real time. So that's -- but it slows the process down. And then, of course, we've had a significant number of protests on new business, new business, net new business. So those couple of things will work their way out over the next year that the executive order for firm fixed price has to be implemented by the government by the middle -- this time next year. So we still have some time for that to continue to play out. But overall, I think it will be real positive for the profitability of the business. Colin Canfield: Got it. Got it. And then maybe if we could talk about portfolio shaping. Travis, if you could maybe characterize kind of where you're at in terms of selling additional pieces and delevering faster and how you think about kind of the sizing of those pieces? Stephen Arnette: I think there's an inherent portfolio shaping going on and what's happening organically in the business right now. I mean some of our current contracts, we're seeing increments or sub-elements of the contract effort shift, as John mentioned, the higher margins, some fixed price types of elements. And a lot of that's coming through some of the IDIQ mechanisms on our existing contracts. I would say even if you look at the trends in our current business development activities, really across the portfolio, we've begun to see an incremental shift toward OTAs, other transactional authorities and commercial service offering type procurements and our team has been very responsive to that. So I think even without some kind of inorganic type activity organically, that shift is happening. And as John mentioned, it's coming through in the contract mix as we see more and more of the portfolio migrate toward fixed price. So there is kind of this steady trend of organic portfolio optimization happening. John Heller: Yes. And I think Travis mentioned this, a lot has changed in the last 24 months. And if you think of FY '25, that was a year of integration. Our business development pipeline was pretty much already set before the merger. But we've had now almost 2 years to really work with the combined enterprise that the new Amentum represents, which has opened the doors to a lot of technology-enabled opportunities that have allowed us to shift our focus in our pipeline from lower margin, say, managed services type work to technology-enabled work. And we're prioritizing that and it's starting to -- it's going to take time. We'll see a little bit of that this year. But as we think about '27 and '28, and we'll see that shift to more fixed price, more T&M, less cost plus, more technology-enabled solutions, all driving toward higher margins. In some cases, fewer product buys, which are just part of the contracts we do, which does impact kind of revenue in the short term. But I think in the long term, we're excited about where that growth will come from. Operator: Your next question comes from the line of Gavin Parsons with UBS. Gavin Parsons: I just wanted to dig into the backlog kind of visibility to revenue conversion, right? Nice growth in funded, nice growth in total. And how do I reconcile that with the 0% to 1% growth next year? I mean, is that NASA that just needs to come out? And otherwise, kind of 10% funded backlog growth gives you pretty good visibility to mid-single digits? Or how do I think about backlog converting to revenue? Stephen Arnette: Yes. So as we've talked about before, you're always going to see some kind of quarter-to-quarter fluctuations in terms of both funded and unfunded backlog. But at a high level, we're really pleased with, as John mentioned, the business development performance and getting to that kind of $48 billion in backlog. And as you noted, funded backlog is up 10% year-over-year. We've always said kind of despite the kind of fluctuations you can see from quarter-to-quarter on that, we feel comfortable in that $5 billion to $6 billion to $7 billion worth of funded backlog range, providing the right visibility we need to achieve our revenue objectives. And we really haven't seen any notable changes in the conversion of unfunded into funded. So we feel good about the eventual conversion of bookings into revenue as we set up for next year. And as I mentioned earlier, we've got 92% of our revenue visibility next year and firm or follow-on work. Gavin Parsons: Got it. And then could you just spend a little bit more time on what changed at NASA now that you're assuming kind of the high end of the range of revenue being in-sourced. And just remind us your total NASA exposure and how we get confidence that, that doesn't expand more than to the 3%. Stephen Arnette: Sure. Maybe I'll just back up and level set quickly and kind of get to the specifics of your question. But as John mentioned, NASA is taking this initiative to bolster the scientific engineering expertise as they think about a bigger mission set, more bold mission set into the future, programs like Moon to Mars and all of that. And so as you cited, our initial view based on preliminary input from the client was like a 1% impact, and we talked about that last time. But since then, NASA has solidified their plan, and we've been able to sit with our NASA customer. I mean, center by center, individual contract by contract. And so we now -- NASA has firmed up their plan. They've shared the plan with us, and we have a detailed view on that. You're correct, the in-sourcing goes to the upper bound of what we originally thought could possibly occur. But now that we understand and kind of summing up the impacts, we have good visibility on the 3% impact, and we're confident in that estimate. Just to better characterize, we don't have all the contract actions in hand. Some contract mods right now are in negotiation and progress, and NASA has actually moved out on beginning to hire employees. So this transition is underway, and we have a good view. I would just offer 2 other quick points that I think are important. It was mentioned in John's remarks, but the impact of contracts, they are margin dilutive to Amentum. So the EBITDA impact will certainly be less than the revenue. And it's also true that some of the remaining work on our contracts will transition to firm fixed price consistent with the Trump administration's executive order. And so this too will incrementally lessen the EBITDA impact. And the second point I would mention kind of thinking longer term, just as the CMOE II and the COSMOS awards this quarter highlight, Amentum remains a trusted partner. And so we're navigating the strategic reset that NASA is executing, knowing that a strong agency is good for the nation and world, and we expect there will be future growth opportunities. Our larger contracts remain in place. So they offer IDIQ mechanisms that will allow NASA to mobilize Amentum as these big missions come into reality. So we absolutely see continuing opportunity in the mid- to longer term. Operator: Your next question comes from the line of Greg Parrish with Morgan Stanley. Gregory Parrish: I wanted to think through the revenue guide for 2026, specifically the business delays. I think you called out a few things, right, protest and procurement delays a little bit on the executive order, too, maybe. Maybe if you could just maybe unpack some of those items a little bit more. Are they particular markets? And is that something you expect to return to a normal cadence in '27? Or could it also be a headwind early next year? Travis Johnson: Sure. Yes, I think you covered well the dynamics that we're seeing as we look to close out fiscal year '26, roughly $175 million from new business delays, notably around the new business that we've won that is under protest that is spread across the portfolio. It's a handful of opportunities. It's not kind of concentrated in one particular area or another. And just the timing that it's taking to get those through the process, including some that are in corrective action, just having that impact on the year and then materials and nonlabor volume, obviously, somewhat little bit harder to control and predict in terms of when things are delivered or procured. So those are the dynamics that are driving FY '26. I would say that as we look into Q4, we're expecting growth that's really consistent with what we've done from a year-to-date perspective, which is 2% at the midpoint, again, consistent with our year-to-date performance, excluding the shutdown impact in Q1. And also Q4 seasonally our highest revenue-generating quarter. So the 26% contribution for the full year that you see there is consistent with historical trends. And then 99% of it is from a follow-on. So we feel really good about the Q4 guide. Second part of your question headed into '27. As we put those preliminary expectations out there for '27, we've contemplated our latest thinking and views and what we're seeing in terms of the award environment, in terms of what we're seeing and how long it takes to get through protest or corrective action. So I think we've factored that in, in an appropriate way in how we see '27 playing out. Gregory Parrish: Okay. Fair enough. And then maybe just zooming back a little bit, like what needs to happen to kind of bring this all together, right? You've had I think a ton of success commercially, great bookings trends. You're in great markets. But it seems like there's sort of little unique items that have been working against you. In your view, sort of what needs to happen to get you toward your mid-single-digit potential? John Heller: Yes. We've talked a lot about nuclear. I think we have seen consistent success there over the past 2 years. We feel really good about the outlook of our pipeline and the opportunities. I think seeing those mature over the next couple of years to be funded to -- into construction. And then you see a very significant ramp-up, and we provided that slide in the presentation that provides some flavor of what we're seeing in terms of the volume of opportunities and the Savannah River AI data center, nuclear power project is a great example. This is going to be a decades-long project, but it represents a very significant opportunity for Amentum and our partners. But -- and we will see progress made that we can articulate milestone achievements. First thing is to get the lease negotiated with the U.S. government and put our business plan together, and we'll be able to talk to that and these milestones as they're achieved. But a project like that is going to take years to see matriculate into something that really impacts the business. So I think the one thing that I would be looking for is just continued progress in the U.S. nuclear industry and other global opportunities that we're tracking around the Rolls-Royce partnership, the Westinghouse partnership where we can see more projects awarded and brought online into the future. Operator: Your next question comes from the line of Trevor Walsh with Citizens. Trevor Walsh: Maybe just a couple of higher level, more macro for both the digital infrastructure and the nuclear opportunities. I'd love to hear your opinion or thoughts on this, Steve. But great to see the digital infrastructure wins overall that you announced in the quarter. Is there a way for you all to just lean into that a little bit more, whether it's by resource allocation, et cetera? Or is the opportunity set there particular to you and what you guys can deliver just a finite or a more defined set of opportunities, and it is what it is. So I just would like to start there, if we could. Stephen Arnette: Sure. Great question, very timely, actually. I mean we are really excited about the continued accelerating progress in the critical digital infrastructure space. The team continues to focus on that. I would say that as a practical matter, we have a great track record of being able to find entree with a client, demonstrate significant value add and then scale with the client. And so we're right now, if you think about kind of the data center world specific and the hyperscalers, we're kind of moving to scale with a client. We've kind of found entree with a second and also making approaches with 1 or 2 others where we're getting started. So we really do feel like we're kind of at that attractive part of the curve where we're beginning to launch into an opportunity to scale. And I think the reason that's happening and the reason that we're able to demonstrate value is there's so much volume of project activity happening so quickly lots of projects happen simultaneously. And the industry is still trying to figure out how do I engineer, how do I construct, how do I integrate these complex facilities. And I think we've been able to bring a little bit of an improved solution to that where kind of engineering with systems integration, being able to stitch all that together in a way that optimizes schedule and minimizes delivery risk for the project. And so there's just a real receptive market there. So we absolutely see the continued opportunity to scale. And to your point about resource allocation, we are incrementally biasing resources there. We continue to make key strategic hires to bolster not only the business development, but also the project leadership part of that team. So really excited about the quarters to come for critical digital infrastructure. Trevor Walsh: Awesome. That's great. Maybe just one quick follow-up, and John, maybe best for you. I appreciate the perspective around the kind of anticipated growth rates for the nuclear energy revenue opportunity. And I understand kind of the dynamics of these deals and these contracts just generally where in the planning stages, revenues may be kind of a little bit smaller scale or slower to develop. And then as the project really kicks off kind of in the back years is when you really see the top line impact. Are there any other -- other than that just natural progression, are there any other milestones either from a regulatory standpoint or anything else that we should be mindful of to get to that 20%, 25% in the out years type of look that you kind of have contemplated in the slide? John Heller: Yes. I think if you look at Europe, we're having great success, and we have great history, and we're involved in a whole host of projects, and we see other opportunities. I think the real question mark and that we are starting to see some progress with the Savannah River announcement would be, I think, a tremendous milestone, but that is progress in the United States that if you look at the last 30 years, very little new build activity. I think this administration is very much focused on the need for additional electricity to power the AI economy and that it's a national security issue. So this administration is very supportive. I think the hyperscalers fully understand that if they're going to get the ability to build the data centers they need to sustain their businesses, they need additional electricity. So I think there are 2 things. One, that's driving it is the Trump administration's desire for 10 more gigawatt plants under construction by 2030. I think they are absolutely focused on that to make that happen. So that's going to be a key milestone. The Savannah River project is one of those engagements that can get 2 or more of those 10 under construction by 2030. And there are others that are being contemplated by the U.S. government in partnership with other companies, including Amentum. I think the other thing is just the overall SMR market with a whole host of OEMs, including Westinghouse and of course, Rolls-Royce, where we're working with. But there are other OEMs that are putting tremendous investment and the U.S. government is supporting those companies because the need for alternatives to larger gigawatt plants and having smaller, say, between 100 to 400-megawatt opportunities to build and maybe in a faster way and a bit more flexibility in communities across the United States. So as we see continued progress and start to see some additional SMR projects greenlit, that will point to a real window of opportunity for our business to really accelerate. Operator: Your next question comes from the line of [ Matti Roberts ] with RBC Capital Markets. Matthew Akers: Was this for maybe for Ken Herbert with RBC? I just wanted to follow up on the -- you've got basically 50% of your revenues within the national security business. Maybe you can comment on how you're thinking about this business within sort of a focus within the core business. I can appreciate a lot of growth opportunities. As we think about this business, which does appear to be a bit of an anchor on sort of sentiment on the overall business, should this just naturally continue to mix down as you see better growth in other areas? Or is there a real maybe sort of unlock on either revenues or margins within the national security business, in particular, that could help sort of the underlying core outlook? John Heller: Thanks for the question. I think that if you look at today at the portfolio, it has -- it's actually shifted just incrementally less, but yes, approaching 50% of the portfolio in kind of national security. Of course, that does -- there's some diversification even within that because in the U.S., where we have a strong presence both in the U.K. and Australia. So there's some nice diversification there as well. We absolutely would not characterize that as an anchor. I mean I think there are large parts of the portfolio that are really going through some pretty exciting transformation. Some is organic kind of driving more technology solutions into the missions we drive and support. And our teams are kind of getting used to, and I think it holds for the whole sector our teams are kind of operating in a mode of transforming the mission while we execute the mission. And we're very much engaged in enduring no fail missions, but the continuous integration of digital AI approaches to be able to more quickly integrate technologies to deal with evolving threat environment, so that is the norm now for our business. As we think about it, even our national security work as we execute in that manner, we have opportunities now driven by the catalyst of the EO from the Trump administration to shift more of our work out of this kind of cost plus by the hour into a solution base whether it be as a service or just a fixed price enterprise solution. And so there is absolutely kind of an organic transformation of that part of the Amentum portfolio and national security happening as we go. Kenneth Herbert: Okay. And maybe just to put a finer point on it, is it realistic to think that as we continue to see growth in broader defense spending that, that part of the portfolio could get to mid-single-digit growth? Or that might be a little ambitious? Travis Johnson: Yes. I think as we view it today, Ken, certainly, our base case is not to see any significant impact to the budgets that impact momentum from what we're hearing in terms of the overall defense spending. If that were to occur, it would certainly be a tailwind to how we're viewing that part of the portfolio. And we do think, as I said earlier, that a lot of the things we're doing and the capabilities that we have are directly aligned with what this administration is trying to accomplish. So obviously, we're excited about that. At the same time, we do see probably higher growth opportunities in our accelerating growth markets, as John talked about energy, as Steve talked about critical digital infrastructure. So I think our expectation naturally over time is that those will make up a larger percentage of the portfolio. But as Steve said, that's not to say that we don't see growth opportunities across our core, including in national security. John Heller: And Ken, we really love this question because it gets to kind of the strategy. And I think this touches on one of the real differentiators and strengths of Amentum, and that is our global presence. And that Amentum is a true global company if you think about the peer set. We have 7,000 employees in the U.K. When you look all across Europe, Australia is a huge presence for us. Australia announced that they're moving ahead with infrastructure projects for the upcoming nuclear infrastructure that they're going to have with nuclear subs. Amentum is going to be a part of that. I mean our position in Australia, our position in the U.K., our position across Europe on a defense standpoint. So when we think of defense, and you asked that question, we're thinking globally. And we -- of course, we're not trying to be in every country in the world. We have a great presence in the U.K. We have a great presence in Australia, certainly, those 2 markets. And we feel really good about the growth prospects there as well as being one of the leaders in the U.S., which has the largest budget. So of course, we're going to be focused there. But we like the broader opportunities that exist in that defense market. Operator: [Operator Instructions] Your next question comes from the line of Andre Madrid with the U.S. Bancorp BTIG. Andre Madrid: Yes. I was wondering if you can comment on what specific budget scenarios are contemplated in the '27 preliminary outlook? I know you kind of touched on it slightly there, but I wanted to hit on a bit more pointedly. John Heller: Yes. Our base case is, I'll say, stable budget environment. And obviously, we're headed toward what's likely to be a continuing resolution at least through the better part of our first quarter. So we've contemplated what that could look like. So I'd say, especially within kind of the range of outcomes that we anticipate, we factored in a relatively consistent budget environment. Andre Madrid: Got it. And then on the exiting of low to no margin work, I think you mentioned that this is base ops related. I wanted to clarify though, is this decision in part impacted by the current global threat environment at all? Is this something we're seeing across some peers? So -- or is it just purely based on the margin profile? Stephen Arnette: Yes. It is not related at all to the global threat environment. It's domestic here. And as we've talked about, allocating resources toward higher growth, higher-margin opportunities is something that we're focused on. So this is isolated to just a few low to no margin kind of base operations programs here in the U.S. And as we said, they represent about 1% of revenue. So really just an intentional decision on where we're prioritizing our resources for the highest return opportunities. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Amentum, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amentum wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Amentum. The Motley Fool has a disclosure policy. Amentum (AMTM) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Amentum’s Q2 results drew a significant negative market reaction, with management citing extended procurement delays and the impact of contract protests as key reasons for revenue underperformance. CEO John Heller acknowledged that, while the company’s sales fell below expectations, a favorable shift in business mix and disciplined operational execution resulted in higher profitability and strong cash generation. Management also pointed to continued growth in backlog and highlighted robust contract wins across nuclear, digital infrastructure, and national security markets. Is now the time to buy AMTM? Find out in our full research report (it’s free). Revenue: $3.49 billion vs analyst estimates of $3.57 billion (2% year-on-year decline, 2.2% miss) EPS (GAAP): $0.27 vs analyst expectations of $0.32 (14.9% miss) Adjusted EBITDA: $290 million vs analyst estimates of $284.4 million (8.3% margin, 2% beat) Operating Margin: 4.9%, up from 2.9% in the same quarter last year Backlog: $48.2 billion at quarter end, up 8.1% year on year Market Capitalization: $5.25 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Tobey Sommer (Truist): Asked about capital deployment plans following deleveraging. CFO Travis Johnson emphasized a disciplined approach, considering M&A, share repurchases, and debt reduction, with a focus on maximizing free cash flow per share. Christopher Barbero (JPMorgan): Inquired about organic growth prospects and international nuclear opportunities. CEO John Heller cited a strong pipeline, especially in Europe and the Middle East, and ongoing success with the Rolls-Royce partnership. Colin Canfield (Cantor Fitzgerald): Probed the extent of revenue visibility for next year. COO Stephen Arnette stated that approximately 92% of next year’s revenue is already covered by existing or follow-on work, providing confidence in guidance. Gavin Parsons (UBS): Questioned the specifics behind NASA’s in-sourcing and its impact on revenue. Arnette clarified that the revised 3% headwind is now well-defined and expected not to expand further, with the EBITDA impact mitigated by the margin profile. Gregory Parrish (Morgan Stanley): Asked about procurement delays and steps needed to achieve mid-single-digit growth. Heller pointed to maturing nuclear projects and milestones in the U.S. nuclear industry as essential for future acceleration. Looking ahead, the StockStory team will be watching (1) the pace of backlog conversion into revenue, especially as contract protests and procurement delays resolve, (2) execution and scaling of new nuclear and digital infrastructure projects, and (3) the impact of NASA’s workforce in-sourcing on both revenue and margin mix. Additional attention will be paid to milestones in Amentum’s partnerships with Rolls-Royce and Westinghouse, as well as developments in U.S. and international nuclear initiatives. Amentum currently trades at $21.55, down from $24.44 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

This article first appeared on GuruFocus. Revenue: $3.5 billion in Q3 FY2026, reflecting normalized growth of approximately 1%. Adjusted EBITDA: $290 million, up 6% year-over-year, with record quarterly adjusted EBITDA margins of 8.3%. Adjusted Diluted EPS: $0.67, up 20% year-over-year. Free Cash Flow: $135 million in Q3 and $213 million year-to-date. Net Bookings: $3.9 billion in Q3, with a quarterly book-to-bill of 1.1 times and trailing 12 months of 1.3 times. Backlog: Ending backlog of $48 billion; funded backlog increased 10% year-over-year to $6.2 billion. Digital Solutions Segment Revenue: $1.5 billion, up 3% year-over-year, with adjusted EBITDA of $116 million and margins of 8%. Global Engineering Solutions Segment Revenue: $2 billion, with adjusted EBITDA of $174 million and margins of 8.6%, up 110 basis points year-over-year. FY2026 Revenue Guidance: Revised to between $13.8 billion and $13.95 billion. FY2026 Adjusted EBITDA Guidance: Raised to between $1.115 billion and $1.14 billion, with margins of 8.1% at the midpoint. FY2026 Adjusted Diluted EPS Guidance: Increased to a range of $2.40 to $2.50. FY2026 Free Cash Flow Guidance: Maintained at between $525 million and $575 million. Net Leverage: Reduced to 3 times at quarter end, one quarter earlier than expected. Warning! GuruFocus has detected 3 Warning Sign with AMTM. Is AMTM fairly valued? Test your thesis with our free DCF calculator. Release Date: August 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Adjusted EBITDA margins reached a record 8.3% in Q3, up 60 basis points year-over-year, driven by favorable mix and strong operational performance. Adjusted diluted EPS increased 20% year-over-year to $0.67, supported by lower interest expense from debt repayments and refinancing. Net leverage reduced to 3.0x at quarter-end, one quarter ahead of the Capital Markets Day target, positioning for more flexible capital deployment. Book-to-bill of 1.1x in Q3 and 1.3x trailing twelve months, with funded backlog up 10% year-over-year to $6.2 billion, indicating strong future revenue visibility. Strategic wins in nuclear energy, including a $400 million+ commercial nuclear bookings and the Savannah River AI data center project, underscore leadership in a high-growth market. Raised FY2026 adjusted EBITDA guidance to $1.115-$1.14 billion and EPS to $2.40-$2.50, reflecting strong year-to-date performance. Preliminary FY2027 outlook expects 20 basis points margin expansion, with NASA insourcing impact accretive to margins and low-margin program exits improving mix. Q3 revenue of $3.5 billion came in slightly below expectations due to protest delays and lower material volume, with normalized growth of only 1%. NASA workforce directive insourcing is now expected to impact FY2027 revenue by 3%, higher than the prior 1% estimate, creating a near-term top-line headwind. FY2026 revenue guidance was revised down to $13.8-$13.95 billion, removing contributions from new business awards under protest and reflecting lower materials volume. The company is intentionally exiting low-margin programs, representing approximately 1% of revenue, which will reduce top-line growth in FY2027. Near-term growth is impacted by extended protest periods and procurement delays, including effects from the firm-fixed-price executive order, slowing award conversions. Free cash flow guidance for FY2026 remains at $525-$575 million, with no increase despite higher EBITDA, indicating working capital pressures. The company expects only mid-single-digit growth in the remaining portfolio for FY2027, which may not fully offset the NASA and program exit impacts. Q: As your commitment to deleveraging concludes, how are you planning to deploy capital in the following fiscal year?A: Travis Johnson (CFO) stated that reaching a net leverage of 3.0x a quarter earlier than expected positions the company to be more flexible and opportunistic with capital deployment. The approach will be disciplined, focusing on the highest long-term returns, and will consider options including M&A, share repurchases, and continued debt reduction. John Heller (CEO) added that the company's organic business development momentum, particularly in nuclear energy, means transformational M&A is not required to achieve its growth strategy. Q: Can you provide more detail on the preliminary fiscal year 2027 outlook, specifically regarding the NASA workforce directive impact and the decision to exit certain low-margin programs?A: Steve Arnette (COO) explained that NASA has solidified its plan to insource certain workforce elements, and the impact is now expected to be at the upper bound of prior scenarios, resulting in a 3% revenue impact for FY2027. He noted the impacted contracts are margin-dilutive, so the EBITDA impact will be less than the revenue impact. Travis Johnson (CFO) added that the company has made an intentional decision to exit a few no- to low-margin programs, representing approximately 1% of revenue, to allocate resources to higher-return opportunities. This is not related to the global threat environment but is purely a margin-profile decision. Q: How should we think about the split between Digital Solutions (DS) and Global Engineering Solutions (GES) for the preliminary 2027 outlook?A: Travis Johnson (CFO) declined to provide segment-specific guidance this early but stated that at a macro level, the NASA impact, which is in the Digital Solutions segment, will put some pressure on that segment's growth. However, setting that aside, the company sees organic growth and margin expansion opportunities across both segments for the next fiscal year. Q: How much of the fiscal year 2027 revenue outlook is covered by existing backlog and expected pending awards?A: Travis Johnson (CFO) stated that as of today, the company expects approximately 92% of FY2027 revenue to come from existing or follow-on work, providing a high level of visibility this early. He noted that the adjudication of the $32 billion in pending awards in the coming months will have an impact on FY2027, but the company feels good about the current visibility. Q: Can you unpack the specific items driving the revenue guide for fiscal year 2026, such as protests and procurement delays?A: Travis Johnson (CFO) attributed the revenue revision to roughly $175 million in new business delays, notably from awards under protest spread across the portfolio, and lower-than-expected materials and non-labor volume. He stated that Q4 growth is expected to be consistent with year-to-date performance at approximately 2% at the midpoint, and that the FY2027 preliminary outlook has factored in the current award environment and protest timelines. Q: What needs to happen to get the company towards its mid-single-digit growth potential?A: John Heller (CEO) highlighted the continued success in nuclear energy and the maturation of the pipeline into funded construction phases as key drivers. He cited the Savannah River AI data center and nuclear power project as a significant, decades-long opportunity that will provide milestone achievements. He also pointed to continued progress in the US nuclear industry and global opportunities through the Rolls-Royce and Westinghouse partnerships as key indicators for accelerated growth. Q: Can you provide more color on the opportunities in the critical digital infrastructure market and how Amentum plans to scale?A: Steve Arnette (COO) expressed excitement about the accelerating progress in critical digital infrastructure, noting the company is moving to scale with a first hyperscaler client and has found entry with a second. He attributed success to the company's ability to bring engineering and systems integration solutions that optimize schedule and minimize delivery risk in a market with high project volume. The company is incrementally biasing resources and making strategic hires to bolster business development and project leadership in this area. Q: How should we think about Amentum's involvement in US allied nuclear power programs, such as the reported agreement with Saudi Arabia?A: John Heller (CEO) stated that Amentum has a strong pipeline of global opportunities and sees opportunities in countries like Saudi Arabia as open to the company given its global brand. He highlighted the company's established presence in Europe, including involvement in 17 nuclear power plant construction projects in the UK and the Rolls-Royce partnership, and noted the company is actively tracking opportunities globally for near-term growth. Q: Given that national security is roughly 50% of revenue, should this business naturally mix down, or is there an unlock on revenues or margins within this segment?A: Steve Arnette (COO) pushed back on characterizing national security as an anchor, highlighting diversification across the US, UK, and Australia. He noted an organic transformation within the portfolio, driven by the executive order favoring firm-fixed-price work, which shifts the business from cost-plus to solution-based offerings. Travis Johnson (CFO) added that while the base case assumes no significant impact to defense budgets, the company sees higher growth opportunities in its accelerating growth markets, which will naturally become a larger percentage of the portfolio over time. Q: What specific budget scenarios are contemplated in the 2027 preliminary outlook?A: Travis Johnson (CFO) stated that the base case assumes a stable budget environment, contemplating the likelihood of a continuing resolution at least through the better part of the first quarter. He noted that a relatively consistent budget environment has been factored into the range of anticipated outcomes. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Amentum Holdings, Inc.? Here are five stocks we like better. Amentum raised its profitability outlook after third-quarter adjusted EBITDA increased 6% to $290 million, the margin reached a record 8.3%, and adjusted EPS rose 20% to $0.67. Full-year adjusted EBITDA guidance increased to $1.115 billion–$1.14 billion, while revenue guidance was lowered to $13.8 billion–$13.95 billion because of protest delays and procurement issues. The company strengthened its balance sheet and maintained solid demand, with $3.9 billion in quarterly bookings, a $48 billion backlog, and net leverage falling to 3.0 times after $125 million in debt repayments. Free cash flow guidance remained $525 million–$575 million, and adjusted EPS guidance rose to $2.40–$2.50. Fiscal 2027 growth will be shaped by portfolio changes and strategic investments: NASA’s workforce initiative is expected to reduce revenue by about 3%, while exits from low-margin programs affect another 1%; excluding those factors, management expects mid-single-digit growth. Nuclear energy, digital infrastructure and space remain key growth areas, including advanced nuclear projects and AI data-center infrastructure. Bargain Alert on 3 Stocks Investors Have Oversold Amentum (NYSE:AMTM) reported third-quarter fiscal 2026 revenue of $3.5 billion, with normalized growth of about 1%, while higher profitability and cash generation led the company to raise its full-year adjusted EBITDA and adjusted earnings-per-share outlook. Chief Executive Officer John Heller said revenue was “slightly below” the company’s expectations, citing near-term pressures including extended protest periods and procurement delays. However, he said operating performance supported better-than-expected profitability and cash flow. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat 2 Essential Data Center Solutions Providers Riding the AI Boom Third-quarter adjusted EBITDA rose 6% from a year earlier to $290 million, producing a record adjusted EBITDA margin of 8.3%, up 60 basis points year over year. Adjusted diluted earnings per share increased 20% to $0.67, while free cash flow totaled $135 million. Chief Financial Officer Travis Johnson said third-quarter revenue was affected by protest delays and lower-margin material volume. For fiscal 2026, Amentum now expects revenue of $13.8 billion to $13.95 billion, reflecting the removal of anticipated contributions from new-business awards currently under protest as well as updated assumptions for materials and non-labor volume. → 3 Dividend Champion Utilities for a Market That Can't Sit Still At the midpoint, the company expects normalized revenue growth of approximately 2% in the fourth quarter, excluding the impact of the government shutdown during the first quarter. Despite the updated revenue outlook, Amentum raised its full-year adjusted EBITDA forecast to $1.115 billion to $1.14 billion. The midpoint implies an adjusted EBITDA margin of 8.1%, which would be 20 basis points above the company’s prior guidance and 40 basis points above fiscal 2025 actual results. Adjusted diluted EPS is now expected to be $2.40 to $2.50. Free cash flow guidance was maintained at $525 million to $575 million. Net leverage declined to 3.0 times at quarter-end after $125 million of debt repayments during the quarter. Amentum repaid nearly $700 million of debt over the past 12 months, according to management. → Is Wingstop's Growth Story Losing Steam? Johnson said the company reached its 3.0-times net-leverage target one quarter earlier than anticipated and remains on track to reduce leverage below 3.0 times in the fourth quarter. He said future capital deployment could include acquisitions, share repurchases and additional debt reduction, with decisions guided by expected long-term returns and free cash flow per share. Amentum reported net bookings of $3.9 billion during the quarter, resulting in a book-to-bill ratio of 1.1 times for the quarter and 1.3 times over the trailing 12 months. Ending backlog was $48 billion, while funded backlog rose 10% year over year to $6.2 billion. The company also reported $32 billion of pending awards, about two-thirds of which represent new business, and $2 billion of work won but under protest. Heller said Amentum is on track to exceed its full-year submissions target of $35 billion, with more than half of submissions involving new business. Digital Solutions generated $1.5 billion in revenue, up 3%, driven by the ramp-up of awards in digital infrastructure and space markets. Segment adjusted EBITDA was $116 million, with an 8.0% margin. Global Engineering Solutions generated $2 billion in revenue, reflecting the impact of joint-venture transitions, a divestiture and the wind-down of certain historical programs. Those factors were partly offset by new awards and growth on existing contracts. The segment’s adjusted EBITDA was $174 million, and its 8.6% margin increased 110 basis points from the prior-year quarter. Management provided preliminary fiscal 2027 commentary, including an expected 3% revenue impact from NASA’s workforce initiative. NASA is seeking to insource certain work currently performed by industry as it expands scientific and engineering capabilities for future missions. Chief Operating Officer Steve Arnette said NASA has shared a more detailed plan with Amentum following contract-by-contract discussions, giving the company confidence in its estimate. While not all contract modifications have been finalized, he said NASA has begun hiring employees associated with the transition. Amentum expects the EBITDA impact to be smaller than the revenue impact because the affected NASA work is margin dilutive. Arnette also said some remaining contract work is expected to shift toward firm-fixed-price arrangements. In addition to the NASA impact, Amentum plans to exit several domestic base-operations programs that generate low or no margins, representing about 1% of company revenue. Johnson said the exits are unrelated to the global threat environment and reflect an effort to direct resources toward higher-growth, higher-return opportunities. Excluding NASA and the low-margin program exits, Amentum expects mid-single-digit growth in the remaining fiscal 2027 portfolio. The company expects approximately 92% of fiscal 2027 revenue to come from existing or follow-on work. Management also expects a 20-basis-point year-over-year increase in adjusted EBITDA margins, supported by portfolio mix, operational improvements and investments in nuclear energy and digital infrastructure. Heller highlighted nuclear energy, critical digital infrastructure and space as the company’s accelerating growth markets. Amentum’s total nuclear revenue is approximately $2 billion, including about $500 million in its global nuclear energy market. During the quarter, Amentum booked more than $400 million of commercial nuclear work supporting the engineering, development and design of advanced nuclear technologies. The company also announced a strategic partnership with Westinghouse to support engineering and commercial deployment of the APX platform, including the AP1000 reactor and AP300 small modular reactor. Amentum was also selected by the Department of Energy to lead development of an artificial-intelligence data center and energy-infrastructure project at the Savannah River site. Heller said the company will lead a consortium to develop, design, build and operate a multigigawatt nuclear facility and AI data centers. The financial framework remains under negotiation, though Amentum expects the economics to be generally consistent with a 2-gigawatt nuclear project producing more than $1 billion in revenue over its life. Management cautioned that nuclear projects can take years to move from planning and engineering into construction, when annual revenue becomes substantially larger. Still, Heller said the company sees a growing pipeline of opportunities in the U.S., Europe and other international markets through relationships including its partnership with Rolls-Royce. In critical digital infrastructure, Amentum recorded $250 million in awards, including work supporting hyperscale data-center construction and commercial network infrastructure. Arnette said the company is investing in business-development and project-leadership capabilities as it works to expand with existing hyperscale customers and pursue new ones. Amentum is a government services provider specializing in mission-critical solutions for defense, federal civilian and commercial customers around the globe. The company delivers integrated services that span the full lifecycle of complex programs and facilities, including engineering, program and project management, logistics, operations, maintenance and environmental remediation. Core offerings include infrastructure support, energy and facilities management, environmental solutions and nuclear services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Amentum Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was characterized by strong operational execution that drove record 8.3% adjusted EBITDA margins, despite revenue coming in slightly below expectations due to protest delays and lower material volumes. The company is successfully shifting its portfolio toward technology-enabled solutions and higher-margin markets, specifically global nuclear energy, critical digital infrastructure, and space, which combined account for over $4 billion in annual revenue. Management attributed revenue softness to extended protest periods on new business and procurement delays linked to the implementation of the firm-fixed-price executive order. Strategic positioning is bolstered by a global footprint, particularly in the U.K. and Australia, allowing the company to capture international defense and nuclear infrastructure spending beyond the U.S. market. The merger has enabled unique revenue synergies, such as the Savannah River AI data center project, which management claims could not have been won without the combined entity's scale and customer access. Operational focus remains on mitigating lower-margin managed services work in favor of fixed-price and time-and-materials contracts to drive sustained profitability. Fiscal 2027 revenue will face a 3% headwind from NASA's workforce directive as the agency in-sources scientific and engineering expertise at the upper bound of prior estimates. Management expects to exit low-to-no-margin domestic base operations programs representing approximately 1% of revenue to prioritize resources for higher-return opportunities. The remaining portfolio is projected to grow at a mid-single-digit rate in fiscal 2027, driven by business development momentum and a $32 billion pipeline of pending awards. Nuclear energy growth is expected to follow a typical project lifecycle: low tens of millions in annual revenue during initial design phases, followed by significant multiples during construction transitions. Guidance assumes a stable global budget environment and anticipates that the shift toward firm-fixed-price contracts will be accretive to overall margins despite near-term procurement friction. Achieved a net leverage milestone of 3x one quarter earlier than expected, providing increased flexibility for future capital deployment including M&A and share repurchases. The Savannah River Site project represents a potential $1 billion+ lifetime revenue opportunity with additional economic interests in commercial operations, such as data center tokens and nuclear electrons. Extended protest periods and government corrective actions on new business awards remain a primary headwind to near-term revenue conversion. Strategic partnerships with Rolls-Royce and Westinghouse position the company as a lead integrator for global small modular reactor (SMR) and gigawatt reactor deployments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is evaluating M&A, share repurchases, and further debt reduction based on which option provides the best long-term return on investment. Current organic growth capabilities in nuclear and digital markets are sufficient to drive the strategy without requiring transformational M&A. Approximately 92% of fiscal 2027 revenue is already covered by existing or follow-on work, providing high visibility despite current procurement delays. Funded backlog increased 10% year-over-year to $6.2 billion, which management views as a healthy range for meeting revenue objectives. The company is moving from initial entry to scaling with hyperscaler clients by providing integrated engineering and systems integration to reduce delivery risk. Management is intentionally biasing resource allocation and key strategic hires toward this sector to capture the rapid build-out of AI-driven data centers. The 3% revenue impact is considered a firm estimate as NASA has solidified its plan and begun hiring, though the impact to EBITDA will be less due to the low-margin nature of the affected work. Amentum remains a trusted partner for larger NASA missions like Moon to Mars, with IDIQ mechanisms in place for future growth opportunities.

Amentum Holdings (AMTM) came out with quarterly earnings of $0.67 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.35%. A quarter ago, it was expected that this government services company would post earnings of $0.58 per share when it actually produced earnings of $0.6, delivering a surprise of +3.45%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Amentum, which belongs to the Zacks Engineering - R and D Services industry, posted revenues of $3.49 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.97%. This compares to year-ago revenues of $3.56 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Amentum shares have lost about 14.6% since the beginning of the year versus the S&P 500's gain of 13.3%. While Amentum has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Amentum was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.69 on $3.89 billion in revenues for the coming quarter and $2.46 on $14.2 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Engineering - R and D Services is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Matrix Service (MTRX), is yet to report results for the quarter ended June 2026. This energy services company is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of +160.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Matrix Service's revenues are expected to be $247.06 million, up 14.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amentum Holdings, Inc. (AMTM) : Free Stock Analysis Report Matrix Service Company (MTRX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Revenues of $3.5 billion Net Income of $66 million; Adjusted EBITDA of $290 million Diluted Earnings Per Share of $0.27; Adjusted Diluted Earnings Per Share of $0.67 Operating Cash Flow of $146 million; Free Cash Flow of $135 million Backlog of $48.2 billion; Book-to-Bill of 1.1x, Last Twelve Months 1.3x CHANTILLY, Va., August 10, 2026--(BUSINESS WIRE)--Amentum Holdings, Inc. ("Amentum" or the "Company") (NYSE: AMTM), a leading advanced engineering and technology company, today announced results for the third quarter ended July 3, 2026. "We delivered solid third quarter results with strong operating performance, profitability, and free cash flow," said Amentum Chief Executive Officer John Heller. "Although near-term dynamics have impacted our revenue outlook, our strong year-to-date results allow us to increase guidance for both Adjusted EBITDA and Adjusted Diluted EPS. Looking ahead, we’ve made significant progress executing our strategy and our leading business development indicators remain robust including recently announced key wins and partnerships in global nuclear energy. We remain focused on delivering differentiated solutions to our customers and driving long-term value for our shareholders." GAAP Results Revenues of $3,490 million decreased 2% year-over-year driven by a 3% impact from the transition of certain contracts from consolidated to unconsolidated joint ventures and fiscal year 2025 divestitures; partially offset by the ramp-up of new contract awards in critical digital infrastructure and space systems and technologies. Operating income increased as a result of strong operational performance and decreased intangible amortization expense. Net income and diluted earnings per share improved year-over-year, supported by higher operating income and lower interest expense. Non-GAAP Results Adjusted EBITDA of $290 million resulted in Adjusted EBITDA Margins of 8.3%, up from 7.7% in the prior year quarter, driven by continued progress on our margin expansion initiatives including a favorable mix shift and strong operational performance. Adjusted Net Income and Adjusted Diluted Earnings Per Share increased primarily as a result of the strong operational performance and lower interest expense. Non-GAAP Segment Results Digital Solutions revenues increased 3% year-over-year driven by the ramp-up of new contract awards in critical digital infrastructure and space systems and technologies, partially offset by the fiscal year 2025 divestiture of Rapid Solutions. Adjusted EBITDA increased 2% year-over-year as a result of increased revenue volume, partially offset by the divestiture of Rapid Solutions. Global Engineering Solutions revenues decreased 5% year-over-year due to contract transitions from consolidated to unconsolidated joint ventures, a fiscal year 2025 divestiture, and the expected ramp-down of other historical programs; partially offset by the ramp up of new contract awards. Adjusted EBITDA increased 9% year-over-year as a result of continued progress on our margin expansion initiatives, favorable contract mix, and strong program performance. Cash Flow Summary In the third quarter, Amentum generated $146 million and $3 million of net cash from operating activities and investing activities, respectively, and used $121 million in financing activities. Net cash provided by operating activities was driven by strong cash earnings, disciplined working capital management, and reflects one additional pay cycle compared to the prior year quarter. Net cash provided by investing activities included $11 million in capital expenditures and $10 million in cash proceeds from the sale of a minority stake in a legacy joint venture. Net cash used in financing activities consisted primarily of the $125 million voluntary principal payment on the Term Loan B and the impacts from the first amendment to the credit facility. As of July 3, 2026, Amentum had $459 million in cash and cash equivalents and $3,875 million of gross debt. Backlog and Contract Awards As of July 3, 2026, the Company had total backlog of $48.2 billion, compared with $44.6 billion as of June 27, 2025, an increase of 8% driven by $17.7 billion in net bookings and 1.3x book-to-bill. Funded backlog as of July 3, 2026 was $6.2 billion, compared with $5.6 billion as of June 27, 2025, an increase of 10%. Notable Highlights Global Nuclear Energy – Amentum booked over $400 million for the initial engineering, development, and design of advanced nuclear technologies in the growing global nuclear market. These awards support our long-term growth opportunity in next-generation nuclear. Continued Growth in Critical Digital Infrastructure – Amentum was awarded approximately $250 million in contracts to support communication networks, cloud and data center infrastructure, and critical technology modernization. These wins build on Amentum’s core strengths in delivering integrated, large-scale digital infrastructure across both commercial and government markets. Classified U.S. and International Defense Awards – Amentum was awarded over $1 billion in awards to provide defense engineering, logistics, and modernization solutions for U.S. and allied military operations. These awards reinforce Amentum’s position as a trusted partner supporting global defense readiness and mission sustainment. Contract for Organizing Spaceflight Mission Operations and Systems (COSMOS) – Amentum booked ~$500 million associated with NASA’s award of the nine-year COSMOS contract to our mentor-protégé joint venture, to support flight mission operations. The previously announced protest was resolved during the quarter and therefore the award is now reflected in backlog and book-to-bill. Center Maintenance Operations and Engineering (CMOE II) – NASA’s Langley Research Center awarded Amentum a $974 million, 10-year IDIQ contract to deliver cutting-edge support for advanced research, systems engineering, and infrastructure modernization. The previously announced protest was resolved during the quarter and therefore the award is now reflected in backlog and book-to-bill. Fiscal Year 2026 Guidance Amentum updates its fiscal year 2026 guidance as follows: Webcast Information Amentum will host a conference call beginning at 8:30 a.m. Eastern time on Tuesday, August 11, 2026 to discuss the results for the third quarter ended July 3, 2026. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the Amentum website at amentum.com. After the call concludes, a replay of the webcast can be accessed on the Investor Relations website. About Amentum Amentum is a global leader in advanced engineering and innovative technology solutions, trusted by the United States and its allies to address their most significant and complex challenges in science, security and sustainability. Our people apply undaunted curiosity, relentless ambition and boundless imagination to challenge convention and drive progress. Our commitments are underpinned by the belief that safety, collaboration and well-being are integral to success. Headquartered in Chantilly, Virginia, we have approximately 50,000 employees in over 70 countries across all 7 continents. Visit us at amentum.com to learn how we advance the future together. Cautionary Note Regarding Forward Looking Statements This release contains or incorporates by reference statements that relate to future events and expectations and, as such, could be interpreted to be "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements may be characterized by terminology such as "believe," "project," "expect," "anticipate," "estimate," "forecast," "outlook," "target," "endeavor," "seek," "predict," "intend," "strategy," "plan," "may," "could," "should," "will," "would," "will be," "will continue," "will likely result," or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including projections of financial performance; statements of plans, strategies and objectives of management for future operations; any statement concerning developments, performance or industry rankings relating to products or services; any statements regarding future economic conditions or performance; any statements of assumptions underlying any of the foregoing; any statements regarding industry and market trends; and any other statements that address activities, events or developments that the Company intends, expects, projects, believes or anticipates will or may occur in the future. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others: changes in U.S. or global economic, financial, business and political conditions, including changes to governmental budgetary priorities and tariffs and the ongoing conflicts in Europe and the Middle East; our ability to comply with the various procurement and other laws and regulations; risks associated with contracts with governmental entities; reviews and audits by the U.S. government and others; changes to our professional reputation and relationship with government agencies; the occurrence of an accident or safety incident; the ability of the Company to control costs, meet performance requirements or contractual schedules, compete effectively or implement its business strategy; the ability of the Company to retain and hire key personnel, and retain and engage key customers and suppliers; the failure to realize the anticipated benefits of the 2024 transaction with Jacobs Solutions Inc.; potential liabilities associated with shareholder litigation or other settlements or investigations; evolving legal, regulatory and tax regimes; and other factors set forth under Item 1A, Risk Factors in the annual report on Form 10-K (the "Annual Report"), and from time to time in documents that we file with the SEC. The above list of factors is not exhaustive or necessarily in order of importance. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see the discussions under the section entitled "Risk Factors" in the Annual Report. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Non-GAAP Measures This release includes the presentation and discussion of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Free Cash Flow, and Net Leverage, which are not measures of financial performance under Generally Accepted Accounting Principles in the United States ("GAAP"). These non-GAAP measures should be considered only as supplements to, and should not be considered in isolation or used as substitutes for, financial information prepared in accordance with GAAP. Management of the Company believes these non-GAAP measures, when read in conjunction with the Company’s financial statements prepared in accordance with GAAP and, where applicable, the reconciliations herein to the most directly comparable GAAP measures, provide useful information to management, investors and other users of the Company’s financial information in evaluating operating results and understanding operating trends by adjusting for the effects of items we do not consider to be indicative of the Company’s ongoing performance, the inclusion of which can obscure underlying trends. Additionally, management of the Company uses such measures in its evaluation of business performance, particularly when comparing performance to past periods, and believes these measures are useful for investors because they facilitate a comparison of financial results from period to period. The computation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability. Definitions of applicable non-GAAP measures and reconciliations to the most directly comparable GAAP measures are provided elsewhere in this release. In addition to the above non-GAAP financial measures, the Company has included backlog, net bookings, and book-to-bill in this release. Backlog is an operational measure representing the estimated amount of future revenues to be recognized under negotiated contracts, and net bookings represent the change in backlog between reporting periods plus reported revenues for the period. Book-to-bill represents net bookings divided by reported revenues for the same period. We believe these metrics are useful for investors because they are an important measure of business development performance and are used by management to conduct and evaluate its business during its regular review of operating results. AMENTUM HOLDINGS, INC. UNAUDITED NON-GAAP FINANCIAL MEASURES The presentation and discussion of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, and Net Leverage are not measures of financial performance under Generally Accepted Accounting Principles in the United States ("GAAP"). These non-GAAP measures should be considered only as supplements to, and should not be considered in isolation or used as a substitute for, financial information prepared in accordance with GAAP. Management believes these non-GAAP measures, when read in conjunction with our consolidated financial statements prepared in accordance with GAAP and the reconciliations herein to the most directly comparable GAAP measures, provide useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. The computation of non-GAAP measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability. Adjusted EBITDA is defined as GAAP net income attributable to common shareholders adjusted for interest expense and other, net, provision for income taxes, depreciation and amortization, and excludes the following discrete items: Acquisition, transaction, and integration costs – Represents acquisition, transaction and integration costs, including severance, retention, and other adjustments related to acquisition and integration activities. Amortization of intangibles – Represents the amortization of intangible assets. Divestitures – Represents divestiture gains and losses. Utilization of certain fair market value adjustments assigned in purchase accounting – Represents the periodic utilization of the fair market value adjustments assigned to certain equity method investments and non-controlling interests based on the remaining period of performance for the related contract. Stock-based compensation – Represents non-cash compensation expenses recognized for stock-based arrangements. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenues. Adjusted Net Income is defined as GAAP net income attributable to common shareholders excluding the discrete items listed under Adjusted EBITDA and the related tax impacts. Adjusted Diluted EPS is defined as Adjusted Net Income divided by diluted weighted average number of common shares outstanding. Free Cash Flow is defined as GAAP cash flow provided by operating activities less purchases of property and equipment. For the third quarter of fiscal year 2026, Free Cash Flow was $135 million, consisting of $146 million of GAAP cash flow provided by operating activities less $11 million of purchases of property and equipment. Net Leverage is defined as GAAP total debt (excluding unamortized original issue discount and deferred financing costs) less cash and cash equivalents, divided by last twelve months Adjusted EBITDA, which is a non-GAAP measure. For the third quarter of fiscal year 2026, Net Leverage was 3.0x, consisting of $3,875 million of total debt less $459 million of cash and cash equivalents, divided by the last twelve months Adjusted EBITDA of $1,128 million. AMENTUM HOLDINGS, INC. UNAUDITED NON-GAAP FINANCIAL MEASURES (in millions, except per share data and margin percentages) The following table presents the reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS to the most directly comparable GAAP measures for the three months ended July 3, 2026: AMENTUM HOLDINGS, INC. UNAUDITED NON-GAAP FINANCIAL MEASURES (in millions, except per share data and margin percentages) The following table presents the reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS to the most directly comparable GAAP measures for the nine months ended July 3, 2026: AMENTUM HOLDINGS, INC. UNAUDITED NON-GAAP FINANCIAL MEASURES (in millions, except per share data and margin percentages) The following table presents the reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS to the most directly comparable GAAP measures for the three months ended June 27, 2025: AMENTUM HOLDINGS, INC. UNAUDITED NON-GAAP FINANCIAL MEASURES (in millions, except per share data and margin percentages) The following table presents the reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS to the most directly comparable GAAP measures for the nine months ended June 27, 2025: View source version on businesswire.com: https://www.businesswire.com/news/home/20260810801923/en/ Contacts Investor Relations Contact Joseph [email protected] Media Contact Roela [email protected]