Amentum (NYSE:AMTM) reported first-quarter results it said kept the company on track to meet its fiscal 2026 outlook, despite disruptions tied to what management described as the longest government shutdown in history. On the company’s earnings call, executives highlighted steady bookings, margin expansion, and progress toward a targeted reduction in leverage.
Quarterly results and shutdown impacts
CEO John Heller said performance was “largely in line with our expectations” even with the shutdown affecting the quarter. For the first quarter, Amentum reported revenue of $3.2 billion, adjusted EBITDA of $263 million, and adjusted EBITDA margin of 8.1%. Adjusted diluted EPS was $0.54, which CFO Travis Johnson said was up 6% year over year and benefited from lower interest expense related to debt reduction.
Adjusted EBITDA margin expanded 40 basis points year over year to 8.1%. Johnson attributed margin expansion to strong program performance, reduced indirect spending due to realized cost synergies, and disciplined expense management during the shutdown, alongside the company’s effort to prioritize higher-margin work.
Bookings, backlog, and pipeline
Management emphasized another quarter of robust bookings. Heller said Amentum delivered $3.3 billion in net bookings, resulting in a first-quarter book-to-bill of 1.0x and a last-twelve-months book-to-bill of 1.1x. Including joint venture awards, Amentum’s “imputed” last-twelve-months book-to-bill was 1.3x.
Backlog grew 4% to more than $47 billion. Heller added that Amentum ended the quarter with $23 billion of proposals awaiting award, “the majority of which are new business,” including nearly $2 billion already won but under protest or awaiting corrective action.
Johnson said funded backlog rose to nearly $7 billion, up 23% from the prior quarter. He reiterated that the company is comfortable with funded backlog in a $5 billion to $7 billion range.
Executives also pointed to expected bidding activity. Johnson said the company has more than $35 billion of bids expected to be submitted during the year and remains on track to achieve full-year book-to-bill greater than one, while noting timing variability and protests as factors that can affect when wins translate into revenue.
Market focus and notable awards
Heller reiterated the company’s “accelerating growth markets” framework: space systems and technologies, critical digital infrastructure, and global nuclear energy. During the quarter, management highlighted several awards, including nuclear-related wins and select U.S. defense and IT contracts.
- Rolls-Royce selected Amentum as global program delivery partner for small modular reactors (SMRs), including initial deployments in the U.K. and Czech Republic (announced after quarter-end, per Heller).
- A 10-year, $730 million contract from EDF Energy to support new and existing nuclear power stations in the U.K.
- A five-year, $207 million contract in the Netherlands to provide planning and engineering services supporting potential development of up to 2 GW-scale power plants.
- A U.S. Air Force six-year single-award IDIQ with a ceiling value up to $995 million for unmanned sustainment, modernization, and training.
- DISA’s Compute as a Service contract, a five-year, $120 million award to deliver scalable computing power on demand.
- A three-year, $270 million contract from a foreign military customer for advanced C5ISR solutions.
On nuclear energy, management said demand is accelerating overseas and beginning to pick up in the U.S. Heller said Amentum had nearly $1 billion of nuclear awards in the first quarter alone and described the company’s nuclear business as just over $2 billion within an overall business of more than $14 billion. He cautioned that, given the company’s scale, nuclear’s impact may not be significant “quarter by quarter,” but said the accelerating growth markets—nuclear, space, and digital—are expected to support year-over-year margin improvement.
Heller also discussed timing dynamics for nuclear programs, saying early work often centers on engineering, governance, and regulatory approvals, with revenue accelerating once construction begins. He said reaching peak revenue opportunity can take roughly two to five years, and that the projects are typically five- to 10-year efforts with longer tails beyond that.
On the DISA compute-as-a-service win, Heller described it as an example of “outcomes-based contracting,” structured in a way he characterized as “unit-based fixed price” to deliver outcomes, and said the model could be replicated across other opportunities.
Segment performance, cash flow, leverage, and guidance
In Digital Solutions, Johnson reported revenue of $1.34 billion, up 4% as reported and up 8% on a normalized basis. Adjusted EBITDA was $103 million, producing a 7.7% margin. In Global Engineering Solutions, revenue was $1.9 billion, with normalized revenue described as consistent with the prior year as new awards offset expected rampdowns. Adjusted EBITDA was $160 million and margin increased 80 basis points year over year to 8.4%.
Johnson said free cash flow in the quarter was a use of $142 million, citing timing factors: an additional pay cycle versus the prior-year quarter, and delays in collections tied to shutdown and holiday closures. He said collections in the first five days of the second quarter more than doubled compared with the same period a year ago, and he expressed confidence in meeting full-year free cash flow guidance. On the call, he said roughly 25% of remaining (“to-go”) free cash flow is expected in the second quarter, with the fourth quarter typically strongest due to alignment with the government fiscal year-end.
On liquidity, Johnson said Amentum ended the quarter with $247 million of cash, a fully undrawn $850 million revolver, and no near-term maturities. He also noted a Moody’s credit rating upgrade, which he said reduces interest expense on the company’s Term Loan B by 25 basis points.
Management reiterated a goal of reaching net leverage below 3x by year-end. Johnson reaffirmed fiscal 2026 guidance introduced in November:
- Revenue: $13.95 billion to $14.3 billion
- Adjusted EBITDA: $1.1 billion to $1.14 billion
- Adjusted diluted EPS: $2.25 to $2.45
- Free cash flow: $525 million to $575 million
Johnson said 95% of expected revenue is from existing or recompete business, and he characterized consensus estimates for the second quarter as in line with management expectations. He also said the shutdown impact embedded in guidance was approximately 1% for the year, with the majority occurring in the first quarter.
Looking ahead, Heller and Johnson said they see continued progress in the company’s core markets while emphasizing accelerating growth markets as a driver of mix shift and margin improvement over time, noting that the scale of the backlog means changes in mix will take time to flow through results.
About Amentum (NYSE:AMTM)
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.
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