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.
Guidance Revised as Margins Improve
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.
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.
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.
Bookings, Backlog and Segment Performance
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.
NASA Workforce Initiative Expected to Affect Fiscal 2027 Revenue
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.
Nuclear and Digital Infrastructure Remain Strategic Focuses
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.
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.
