Summary of Amentum (AMTM) Q3 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $3.5 billion, slightly below expectations, reflecting normalized growth of approximately 1%.

Adjusted EBITDA: $290 million, with margins at 8.3%, a 60 basis point increase year-over-year.

Adjusted Diluted EPS: $0.67, up 20% year-over-year.

Free Cash Flow: $135 million for the quarter, contributing to a year-to-date total of $213 million.

Net Bookings: $3.9 billion, resulting in a book-to-bill ratio of 1.1x for the quarter and 1.3x for the trailing twelve months.

Backlog: Total backlog reached $48 billion, with funded backlog up 10% year-over-year to $6.2 billion.

2Strategic Updates and Business Highlights

Continued strong execution in business development, particularly in nuclear energy and critical digital infrastructure.

Notable contract awards included over $400 million in nuclear projects, $250 million in digital infrastructure, and over $1 billion in national security contracts.

Amentum is focusing on core growth areas, including national security, environmental remediation, and homeland security, while also expanding in nuclear energy and digital infrastructure.

The company is implementing a strategy to mitigate revenue impacts from NASA's workforce directive, which is expected to reduce revenue by 3% in fiscal year 2027.

3Forward Guidance and Outlook

Fiscal Year 2026 Guidance: Revenue expected between $13.8 billion and $13.95 billion, with adjusted EBITDA raised to a range of $1.115 billion to $1.14 billion.

Fiscal Year 2027 Preliminary Outlook: Anticipates mid-single-digit growth, offsetting a 3% revenue impact from NASA's in-sourcing initiative and the exit from low-margin programs.

The company expects continued strong earnings per share and free cash flow growth, driven by margin improvements and disciplined capital allocation.

4Bad News, Challenges, or Points of Concern

Revenue came in below expectations due to delays from protests and low-margin material volume.

The impact of NASA's workforce directive has increased, now projected at 3% for fiscal year 2027, which is higher than previously anticipated.

The company is experiencing procurement delays and challenges related to new business awards, which may affect future revenue growth.

There is a risk of continued delays in the award process due to executive orders affecting firm fixed-price contracts.

5Notable Q&A Insights

Management emphasized the importance of maintaining a stable budget environment in their preliminary outlook for fiscal year 2027.

There is confidence in the long-term potential of the nuclear energy market, with significant projects expected to ramp up in the coming years.

The company is focused on organic growth and is not reliant on transformational M&A, although it remains open to strategic acquisitions.

Amentum's leadership highlighted the importance of adapting to market dynamics, particularly in national security, where they are shifting towards higher-margin, technology-enabled solutions.

The exit from low-margin programs is a strategic decision to prioritize resources for higher return opportunities, not influenced by the global threat environment. Overall, while Amentum faces some near-term challenges, particularly related to NASA and procurement delays, the company remains optimistic about its long-term growth trajectory and strategic positioning in key markets.