Third Quarter Fiscal Year 2026
Filed Aug 10, 2026Amentum Reports Third Quarter Fiscal Year 2026 Results: Revenues of $3.5 billion; Net Income of $66 million; Adjusted EBITDA of $290 million; Free Cash Flow of $135 million; Backlog of $48.2 billion.
Revenue declined 2% year-over-year, but operating income, net income, Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow increased. The company raised Adjusted EBITDA and Adjusted Diluted EPS guidance while lowering the revenue outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenuesGAAP | $3,490 million | – | (2%) |
| Operating incomeGAAP | $172 million | – | 67% |
| Net incomeGAAP | $66 million | – | 560% |
| Diluted earnings per shareGAAP | $0.27 | – | 575% |
| Adjusted EBITDAnon-GAAP | $290 million | – | 6% |
| Adjusted EBITDA Marginnon-GAAP | 8.3% | – | +60 bps |
| Adjusted Diluted Earnings Per Share (EPS)non-GAAP | $0.67 | – | 20% |
| Free Cash Flownon-GAAP | $135 million | – | 35% |
| Digital Solutions Adjusted EBITDAnon-GAAP | $116 million | – | 2% |
| Global Engineering Solutions Adjusted EBITDAnon-GAAP | $174 million | – | 9% |
| Total backlogother | $48.2 billion | – | 8% |
| Funded backlogother | $6.2 billion | – | 10% |
| Net bookingsother | $17.7 billion | – | – |
| Book-to-billother | 1.3x | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Digital SolutionsRevenues increased 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. | $1,457 million | – | 3% |
| Global Engineering SolutionsRevenues decreased 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. | $2,033 million | – | (5%) |
Fiscal Year 2026 outlook
- Revenue$13,800 - $13,950
- NoteAdjusted EBITDA: $1,115 - $1,140
- NoteAdjusted Diluted EPS: $2.40 - $2.50
- NoteFree Cash Flow: $525 - $575
Capital returns
- $125 million voluntary principal payment on the Term Loan B.
What drove it
- Company revenue was affected by a 3% impact from the transition of certain contracts from consolidated to unconsolidated joint ventures and fiscal year 2025 divestitures.
- New contract awards ramped in critical digital infrastructure and space systems and technologies.
- Operating income increased due to strong operational performance and decreased intangible amortization expense.
- Adjusted EBITDA Margin expansion reflected a favorable mix shift and strong operational performance.
- Global Engineering Solutions Adjusted EBITDA benefited from margin expansion initiatives, favorable contract mix, and strong program performance.
- Operating cash flow reflected strong cash earnings, disciplined working capital management, and one additional pay cycle compared to the prior year quarter.
- The company booked over $400 million for initial engineering, development, and design of advanced nuclear technologies.
- The company was awarded approximately $250 million in contracts supporting communication networks, cloud and data center infrastructure, and critical technology modernization.
- The company was awarded over $1 billion in classified U.S. and international defense awards.
- Amentum booked ~$500 million associated with NASA's nine-year COSMOS contract, and the award is reflected in backlog and book-to-bill after the protest was resolved.
- NASA awarded Amentum a $974 million, 10-year CMOE II IDIQ contract, which is reflected in backlog and book-to-bill after the protest was resolved.
Concerns
- Revenues decreased 2% year-over-year.
- Global Engineering Solutions revenues decreased 5% year-over-year.
- The company cited near-term dynamics that impacted its revenue outlook.
- The fiscal year 2026 revenue guidance range was updated to $13,800 - $13,950 from $13,950 - $14,300.
- Digital Solutions revenue and Adjusted EBITDA were partially offset by the fiscal year 2025 divestiture of Rapid Solutions.
- Global Engineering Solutions revenue was affected by contract transitions, a fiscal year 2025 divestiture, and the expected ramp-down of other historical programs.
What to watch
- Execution on the ramp-up of new awards in critical digital infrastructure, space systems and technologies, and Global Engineering Solutions.
- Progress of margin expansion initiatives and the favorable contract mix supporting Adjusted EBITDA Margin.
- Conversion of $48.2 billion of total backlog and $6.2 billion of funded backlog into revenue.
- The effect of contract transitions from consolidated to unconsolidated joint ventures and the ramp-down of historical programs on revenue.
- Delivery against fiscal year 2026 guidance of $1,115 - $1,140 of Adjusted EBITDA, $2.40 - $2.50 of Adjusted Diluted EPS, and $525 - $575 of Free Cash Flow.
Balance sheet and cash flow
- Net cash provided by operating activities: $146 million.
- Net cash provided by investing activities: $3 million.
- Net cash used in financing activities: $121 million.
- Capital expenditures: $11 million.
- Cash proceeds from the sale of a minority stake in a legacy joint venture: $10 million.
- Cash and cash equivalents as of July 3, 2026: $459 million.
- Gross debt as of July 3, 2026: $3,875 million.
Analysis
Amentum reported a quarter of improved profitability and cash generation despite lower revenue. Revenues were $3,490 million, down 2% year-over-year, while operating income increased 67% to $172 million and net income increased 560% to $66 million. Diluted earnings per share was $0.27, compared with $0.04 in the prior-year quarter. The company attributed the revenue decline to a 3% impact from contract transitions to unconsolidated joint ventures and fiscal year 2025 divestitures, partly offset by new-award ramp-ups in critical digital infrastructure and space systems and technologies.
The mix of segment results shows Digital Solutions growing while Global Engineering Solutions contracted. Digital Solutions revenues increased 3% to $1,457 million, supported by new awards, though the Rapid Solutions divestiture was a partial offset. Global Engineering Solutions revenues declined 5% to $2,033 million because of joint-venture contract transitions, a fiscal year 2025 divestiture, and ramp-downs of historical programs. Nonetheless, both segments increased Adjusted EBITDA, with Digital Solutions at $116 million and Global Engineering Solutions at $174 million.
Margin performance was the principal positive in the release. Adjusted EBITDA rose 6% to $290 million and Adjusted EBITDA Margin expanded to 8.3% from 7.7%, driven by margin expansion initiatives, favorable mix, and strong operational performance. Management also cited decreased intangible amortization expense as a contributor to higher operating income, while lower interest expense supported year-over-year improvement in net income and adjusted earnings. Free Cash Flow increased 35% to $135 million, and operating cash flow was $146 million, supported by cash earnings, working-capital discipline, and one additional pay cycle compared with the prior-year quarter.
Capital allocation included a $125 million voluntary principal payment on the Term Loan B. At July 3, 2026, cash and cash equivalents were $459 million and gross debt was $3,875 million. Backlog increased 8% to $48.2 billion and funded backlog increased 10% to $6.2 billion, supported by $17.7 billion in net bookings and 1.3x book-to-bill. The release highlighted nuclear, digital infrastructure, defense, COSMOS, and CMOE II awards as additions to business-development momentum.
The updated fiscal year 2026 outlook reflects a lower revenue range of $13,800 - $13,950, versus $13,950 - $14,300 previously, alongside a higher Adjusted EBITDA range of $1,115 - $1,140 and higher Adjusted Diluted EPS range of $2.40 - $2.50. Free Cash Flow guidance remained $525 - $575. The central issue for the remainder of the year is whether new-award ramp-ups, backlog conversion, and mix improvement can offset the revenue effects from contract transitions, divestitures, and historical-program ramp-downs while preserving the reported margin and cash-flow progress.
Management, verbatim
We delivered solid third quarter results with strong operating performance, profitability, and free cash flow.
John Heller, Chief Executive Officer
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.
John Heller, Chief Executive Officer
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.
John Heller, Chief Executive Officer
Not in the filing
stated, not guessed- GAAP gross margin was not reported.
- Non-GAAP gross margin was not reported.
- Operating expenses were not reported.
- Tax rate was not reported.
- Gross profit was not reported.
- Adjusted net income was discussed but no figure was reported.
- Prior-quarter revenue, operating income, net income, EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS, Free Cash Flow, segment revenue, segment Adjusted EBITDA, backlog, and funded backlog were not reported.
- Dividends and share repurchases were not reported.
- A previous quarterly release outlook was not provided; therefore, actual results are not compared with prior guidance in vs_prior_guidance.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.