KBR (KBR) Q4 2025 earnings summary

Executive summary

• Delivered strong operational and financial performance in 2025, expanding margins and generating record cash returns to shareholders despite a challenging award environment across both segments.

• Advanced spin-off preparations, targeting separation in the second half of 2026, with regulatory filings and leadership clarity progressing as planned.

• Both Sustainable Tech and Mission Tech segments exited 2025 with improving momentum, strong pipelines, and high visibility into 2026.

Financial highlights

• FY25 revenues reached $7.8B, up 1% year-over-year; Q4 revenues were $1.9B, down 11% due to award timing and EUCOM scope reductions.

• Adjusted EBITDA for FY25 was $968M (margin 12.4%), up $100M year-over-year; Q4 Adjusted EBITDA was $238M (margin 12.6%), up $12M.

• Adjusted EPS for FY25 was $3.93, up $0.60 year-over-year; operating cash flow was $557M, representing 110% conversion to adjusted net income.

• Returned a record $413M to shareholders through buybacks and dividends in 2025.

• Backlog and options at year-end totaled $23.2B, up 13% year-over-year.

Outlook and guidance

• 2026 guidance: revenues of $7.90B–$8.36B, adjusted EBITDA of $980M–$1.04B, adjusted EPS of $3.87–$4.22, and adjusted operating cash flow of $560M–$600M.

• Guidance assumes 4% year-over-year growth at the midpoint across key metrics.

• Transition costs related to the spin expected at $140M–$180M in 2026.

• CapEx projected at $40M–$50M; effective tax rate of 26–28% due to increased Global South activity.

• Revenues and adjusted EPS expected to be weighted 46% in H1 and 54% in H2 of 2026.