KBR (KBR) Q1 2025 earnings summary

Executive summary

• Revenues rose 13% year-over-year to $2.1 billion, driven by the LinQuest acquisition, Defense & Intel, and Sustainable Technology Solutions, with net income up 25% to $116 million and adjusted EBITDA up 17% to $243 million (margin 11.8%, up 40 bps YoY).

• Diluted EPS was $0.88 (up 28% YoY); adjusted EPS was $0.98 (up 27% YoY), supported by share repurchases.

• Executed growth strategy through LinQuest integration, new contract wins across defense, energy, and technology, and strong project execution.

• Maintained a balanced, resilient business portfolio, reaffirmed 2025 guidance, and returned record capital to shareholders via buybacks and dividends.

• Achieved industry-leading safety performance with record low incident rates and over 101 consecutive Zero Harm days.

Financial highlights

• Q1 2025 revenue: $2.1B (up 13% YoY); organic growth 5%; adjusted EBITDA: $243M (up 17% YoY); margin 11.8%.

• Adjusted EPS: $0.98 (up 27% YoY); diluted EPS: $0.88 (up 28% YoY); net income: $116M (up 25% YoY).

• Operating income grew 17% to $195M; gross profit up 20% to $298M; equity in earnings from affiliates rose to $42M.

• Operating cash flow: $98M (up 8% YoY); cash and cash equivalents at $442M; liquidity at $917M.

• Return of capital to shareholders: $156M in share repurchases and $20M in dividends in Q1.

Outlook and guidance

• FY2025 guidance reaffirmed: revenue $8.7B–$9.1B, adjusted EBITDA $950M–$990M, adjusted EPS $3.71–$3.95, operating cash flow $500M–$550M.

• HomeSafe revenue expected at $300M–$500M for 2025, with move growth ramping in Q3 and Q4.

• Effective tax rate projected at 25%–27%; capex expected at $50M–$60M.

• U.S. government funding secured through September 2025, but future budgets remain uncertain.

• Management remains bullish on long-term outlook, citing robust LNG demand and diversified growth.