KBR (KBR) Q3 2025 earnings summary

Executive summary

• Quarterly revenue was $1.9 billion, essentially flat year-over-year, with year-to-date revenue up 5% to $5.9 billion; net income from continuing operations rose 16% to $118 million.

• Adjusted EBITDA increased 10% to $240 million, with margins up over 100 basis points to 12.4%; Adjusted EPS rose 21% to $1.02.

• Book-to-bill ratio was 1.4x for the quarter, with backlog plus options reaching $23.4 billion, a 13% increase since prior year end.

• Over 60% of adjusted EBITDA has no exposure to U.S. government spending, providing resilience against shutdown risks.

• The planned spin-off of the Mission Technologies segment is progressing, targeting completion by mid-to-late 2026.

Financial highlights

• Q3 revenue: $1.9 billion, flat year-over-year; year-to-date revenue up 5% to $5.9 billion.

• Adjusted EBITDA: $240 million (up 10%); margin 12.4% (up 100+ bps).

• Adjusted EPS: $1.02 (up 21% year-over-year).

• Operating cash flow: $198 million in Q3, $506 million year-to-date (up 24% year-over-year), with cash conversion over 130%.

• Returned over $360 million to shareholders year-to-date via buybacks and dividends.

Outlook and guidance

• FY25 revenue guidance revised to $7.75–$7.85 billion, down from $7.9–$8.1 billion, due to delays in award pace and bid resolutions amid the U.S. government shutdown.

• Adjusted EBITDA and Adjusted EPS guidance unchanged at $960–$980 million and $3.78–$3.88, respectively.

• Operating cash flow guidance maintained at $500–$550 million.

• Guidance assumes government shutdown resolves in November; minimal revenue impact expected if resolved.

• Double-digit growth targets for STS remain intact through 2027, with MTS growth expected at the lower end of prior ranges.