Amentum (AMTM) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenues reached $3.42 billion, up 2.3% pro forma and 72% GAAP year-over-year, driven by the CMS merger and growth in both Digital Solutions and Global Engineering Solutions.

• Net income was $12 million, a turnaround from a $41 million loss in the prior year quarter, with adjusted EBITDA of $262 million and a margin of 7.7%.

• Integration and value capture initiatives are on track, targeting $30 million in run-rate net synergies by FY25 year-end.

• Backlog increased to $45.2 billion, with a book-to-bill ratio of 1.1x, supported by major contract wins including a $3B DOE project and $248M DOD contract.

• Realigned reporting structure into Digital Solutions and Global Engineering Solutions segments, with new leadership and Technology Advisory Councils to drive innovation.

Financial highlights

• Revenues for Q1 FY2025 were $3.416 billion, up 2% year-over-year, with adjusted EBITDA of $262 million (7.7% margin) and free cash flow of $102 million.

• Adjusted diluted EPS was $0.51, up from $0.50 pro forma in the prior year quarter.

• Net income attributable to common shareholders was $12 million, compared to a net loss of $41 million in the prior year quarter.

• Book-to-bill ratio was 1.1x (1.5x including JVs), and total backlog stands at $45.2 billion, or 3.2x annual revenue.

• Cash and cash equivalents at quarter-end were $522 million, with $4.7 billion in debt and $850 million undrawn revolver.

Outlook and guidance

• FY2025 guidance reaffirmed: revenues of $13.8–$14.2 billion, adjusted EBITDA of $1.06–$1.1 billion, adjusted EPS of $2.00–$2.20, and free cash flow of $475–$525 million.

• 96% of FY25 revenues expected from existing or recompete business; sequential increases in all metrics anticipated as new programs ramp up and a 53rd week is included in Q4.

• 68% of remaining performance obligations expected to be recognized as revenue over the next 12 months.

• Guidance includes a ~1% revenue impact from new administration initiatives, with most free cash flow expected in the second half due to seasonality.

• Management views the budget environment as constructive but notes potential risks from government funding delays.