KBR (KBR) Q3 2024 earnings summary

Executive summary

• Achieved double-digit year-over-year growth in revenue, profit, Adjusted EBITDA, Adjusted EPS, and operating cash flow for Q3 2024, with strong performance across all key metrics and robust segment results.

• Raised full-year 2024 guidance for revenue, adjusted EBITDA, and adjusted EPS, supported by robust operational performance, LinQuest acquisition, and strong bookings.

• Integration of LinQuest progressing well, contributing over $60 million in new orders, expanding digital and engineering capabilities, and supporting raised guidance.

• Backlog and options reached $22.1 billion, with $3.3 billion in new bookings and options in Q3 and a group book-to-bill ratio of 1.2x.

• Recognized for sustainability leadership, including AAA MSCI ESG rating and Gold EcoVadis rating.

Financial highlights

• Q3 2024 revenue was $1.95 billion, up 10% year-over-year; adjusted EBITDA was $219 million, up 18% year-over-year (11.2% margin); net income was $100 million.

• Adjusted EPS rose 12% to $0.84; diluted EPS was $0.75.

• Operating income for Q3 2024 was $173 million, up 18% from Q3 2023.

• Year-to-date operating cash flow was $422 million, with 129% YTD conversion; cash and cash equivalents at quarter-end were $462 million.

• Margins improved by 70–74 basis points year-over-year; gross margin was 14.9% and operating margin 8.9% in Q3 2024.

Outlook and guidance

• Fiscal 2024 revenue guidance raised to $7.5–$7.7 billion, adjusted EBITDA to $840–$870 million, and adjusted EPS to $3.20–$3.30.

• Operating cash flow guidance maintained at $460–$480 million.

• Guidance reflects strong operational performance, LinQuest acquisition, and robust market demand.

• STS expected to maintain 11–15% revenue growth and ~20% margins into 2025.

• Backlog reached $17.9–$22.1 billion as of September 27, 2024, with 36% expected to be executed within one year.