KBR Reports Fourth Quarter and Fiscal 2025 Results

Fourth Quarter Fiscal 2025 Results
(All comparisons versus prior year period unless noted.)

• Revenues of $1.9 billion, down 11%, due to the slower pace of awards and contingency EUCOM scope reductions

• Net income attributable to KBR of $111 million, up 46%; Operating income of $191 million, up 36% with an Operating income margin of 10.1%; Adjusted EBITDA² of $238 million, up 5% with an Adjusted EBITDA² margin of 12.6%

• Diluted EPS of $0.87, up 53%; Adjusted EPS² of $0.99, up 10%

• Bookings and options¹ of $2.0 billion with 0.9x book-to-bill¹

Fiscal 2025 Results
(All comparisons versus prior year period unless noted.)

• Revenues of $7.8 billion, up 1%

• Net income attributable to KBR of $415 million, up 11%; Operating income of $778 million, up 18% with an Operating income margin of 10.0%; Adjusted EBITDA² of $968 million, up 12% with an Adjusted EBITDA² margin of 12.4%

• Diluted EPS of $3.21, up 15%; Adjusted EPS² of $3.93, up 18%

• Bookings and options¹ of $11.1 billion with 1.0x book-to-bill¹

HOUSTON, Feb. 26, 2026 (GLOBE NEWSWIRE) -- KBR, Inc. (NYSE: KBR) today announced its fourth quarter and fiscal 2025 results.

“Fiscal 2025 was a year of disciplined execution for KBR as our teams delivered strong operational and financial performance despite a challenging award environment,” said Stuart Bradie, President and Chief Executive Officer.

“We expanded margins, generated robust cash flow, and grew backlog and options while continuing to advance our strategy toward higher‑value, technology‑enabled, and recurring work. Importantly, we also made meaningful progress on the planned spin‑off, sharpening the strategic focus of each business and positioning both companies for long‑term value creation. As we enter fiscal 2026, we are confident in our outlook, supported by strong backlog coverage, improving award momentum, and the continued commitment and performance of our people.”

_{¹ As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.
² As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and Operating cash conversion are non-GAAP financial measures. All non-GAAP financial measures reflect results from continuing operations. See additional information at the end of this release regarding non-GAAP financial information, including reconciliations to the nearest GAAP measures.}

Summarized Fourth Quarter and Fiscal 2025 Consolidated Results

Fourth Quarter Fiscal 2025 Consolidated Results Review
(All comparisons against the fourth quarter fiscal 2024 unless noted.)

Revenues were $1.9 billion, down 11% or $223 million, due to the slower pace of awards and contingency EUCOM scope reductions.

Operating income was $191 million, up 36% or $51 million, primarily due to increases in Equity in earnings of unconsolidated affiliates, decreases in Selling, general and administrative expenses, and a $26 million resolution of an outstanding contract dispute associated with a legacy U.S. government project that did not recur in the current year.

Net income attributable to KBR was $111 million, up 46% or $35 million, primarily due to increases in Operating income noted above and decreases in Interest expense, partially offset by increases in Provision for income taxes.

Diluted earnings per share attributable to KBR were $0.87, up 53% or $0.30, in line with increased Net income attributable to KBR noted above and lower diluted weighted average common shares outstanding due to open market share repurchases.

Adjusted EBITDA² was $238 million, up 5% or $12 million, primarily due to strong project execution, favorable mix and prudent cost management. Adjusted EBITDA² margin was 12.6%, up ~190bps in line with the above.

Adjusted earnings per share² were $0.99, up 10% or $0.09, due to the increase in Adjusted EBITDA² noted above and lower adjusted weighted average common shares outstanding due to open market share repurchases.

Backlog and options as of the quarter end totaled $23.2 billion, up 13% from the prior year. Book-to-bill¹ was 0.9x for the quarter.

Summarized Fourth Quarter and Fiscal 2025 Segment Results

Fourth Quarter Fiscal 2025 Segment Results Review
(All comparisons against the fourth quarter fiscal 2024 unless noted.)

Mission Technology Solutions (MTS)
Revenues were $1.3 billion, down 14% and $213 million, due to contingency EUCOM scope reductions and procurement delays across U.S. Government Defense and Intelligence clients, funding restrictions from U.S. Government Federal Civilian clients, and delays in new awards, including awards won under protest. Revenues from International Government clients and Commercial clients remained largely consistent with the prior year.

Operating income was $118 million, up 44% and $36 million, due to a $26 million resolution of an outstanding contract dispute associated with a legacy U.S. government project that did not recur in the current year and decreases in Selling, general and administrative expenses driven by the decline in Revenues and cost savings from the segment realignment announced in January 2025. Operating income margin was 9.1%.

Adjusted EBITDA² was $145 million, up 4% or $6 million, due to strong project execution and favorable mix, along with disciplined management of Selling, general and administrative expenses. Adjusted EBITDA² margin was 11.2%, up ~198bps from the prior year.

Backlog and options as of the quarter end totaled $19.1 billion, up 15% from the prior year. Book-to-bill¹ was 0.5x for the quarter reflecting award cadence timing.

The following new business awards were announced:

• Awarded an estimated $117 million cost‑plus‑fixed‑fee follow‑on contract to provide Foreign Military Sales support to NAVAIR’s F/A‑18 and EA‑18G Program Office

• Awarded a technical support services contract by the U.S. Geological Survey with a $350 million ceiling to support operations at the Earth Resources Observation and Science Center

• Awarded two firm‑fixed‑price task orders totaling $103 million to support strategic decision‑making, capability development, and personnel readiness for the U.S. Space Force and Department of the Air Force

• Awarded a $77 million firm‑fixed‑price task order under the U.S. Space Force Decision Support for Headquarters Analysis contract to advance digital engineering and assured communications in support of AFRL and Space Systems Command modernization

• Awarded a cost‑plus‑fixed‑fee contract with a $149 million ceiling under the AFLCMC ADEDDIS program to deliver analytics, digital transformation and systems engineering supporting operator readiness at Eglin Air Force Base
  

In addition, MTS announced the following positions on IDIQ contracts that provide competitive differentiation and future growth potential:

• Awarded a seat on the Missile Defense Agency’s SHIELD contract, a $151 billion ceiling vehicle supporting homeland and layered missile defense

• Awarded a seat on the NAVSUP WEXMAC 2.1 – Territorial Integrity of the United States contract, a $10 billion ceiling vehicle supporting expeditionary logistics and contingency operations

Sustainable Technology Solutions (STS)
Revenues were $590 million, down 2% or $10 million, driven by delays in new awards as customers reassessed capital allocation, including reduced petrochemicals capex and a pause in certain green projects with increased emphasis on affordability and energy security.

Operating income was $117 million, up 17% or $17 million, primarily due to increases in Equity in earnings of unconsolidated affiliates due to strong project execution on an LNG project and prior year losses on the legacy Ichthys project that did not recur in the current year, partially offset by increases in Selling, general and administrative expenses related to business development growth and the implementation of a new enterprise resource planning system. Operating income margin was 19.8%.

Adjusted EBITDA² was $121 million, up 3% or $4 million, due to strong project execution. Adjusted EBITDA² margin was 20.5%, up ~101 bps in line with the above.

Backlog as of the quarter end totaled $4.2 billion, up 5% from the prior year. Book-to-bill¹ was 1.6x for the quarter reflecting strengthening award momentum.

The following new business awards were announced:

• Awarded a strategic 10-year digitally-enabled general maintenance services contract for Petro Rabigh's Polymer I and Polymer II plants in the Kingdom of Saudi Arabia

• Awarded an integrated field management services contract by Basra Oil Company for the Majnoon Oil Field in southern Iraq to support production optimization and field modernization

• Awarded a detailed engineering services contract to support Qatar’s offshore development in the Bul Hanine oil and gas field

• Awarded a detailed engineering design contract by ENKA İnşaat ve Sanayi A.Ş. for the Associated Gas Upstream Project Phase 2, part of the Gas Growth Integrated Project in the Basra region of Iraq

• Awarded a technology and engineering contract by IGNIS to support the development of a new green ammonia facility in A Coruña, Spain

• Awarded a technology licensing and engineering contract for KBR’s PureM^SM green methanol technology by Fikrat Al‑Tadweer to support a biomethanol facility converting landfill gas into clean fuels in Saudi Arabia

• Awarded the front‑end engineering design contract for Coastal Bend’s planned natural gas liquefaction and export facility on the Texas Gulf Coast.
  

Additionally, during the quarter, KBR announced that its joint venture, Brown & Root Industrial Services (BRIS), has signed a definitive agreement to acquire Specialty Welding and Turnarounds (SWAT), a leading provider of turnaround, cooling tower and industrial catalyst services. This strategic acquisition creates one of the largest specialty welding and turnaround service providers in North America and supports KBR’s strategy to grow recurring service revenue through unconsolidated joint ventures while maintaining a disciplined, capital‑light operating approach. The transaction closed on January 6, 2026.

Balance Sheet, Cash Flow, and Capital Deployment

Liquidity as of January 2, 2026, totaled approximately $1.1 billion, comprising $605 million in borrowing capacity under the revolving credit facility and $500 million cash and cash equivalents. Net leverage ratio as of January 2, 2026, was 2.2x.

Operating cash flows from continuing operations for the quarter were $51 million, up 24% or $10 million. During the fourth quarter, KBR returned $46 million in capital to shareholders, consisting of $25 million in share repurchases (including withhold to cover shares) and $21 million in regular dividends.

On February 19, 2026, the Board of Directors approved a quarterly dividend of $0.165 per share, or $0.66 per share annualized, reflecting our focus on consistency and balance‑sheet discipline during the spin transaction. The dividend is payable April 15, 2026, to shareholders of record on March 13, 2026.

Issuing Fiscal 2026 Guidance
KBR issues the following full‑year fiscal 2026 outlook for the consolidated company and plans to update standalone outlooks in connection with the planned spin transaction in the second half of 2026:

The company does not provide reconciliations of Adjusted EBITDA, Adjusted EPS, and Adjusted Operating cash flows to the most comparable GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, and acquisition-related expenses without unreasonable effort, which could be material to the company’s results computed in accordance with GAAP.

Management has provided the following assumptions related to fiscal 2026 guidance:

• Capital expenditures: ~$40 - 50 million

• Effective tax rate: 26% - 28%

• Depreciation & amortization: ~$165 million (includes ~$45 million purchased intangibles amortization)

• Adjusted weighted average common shares outstanding: ~127 million

• Phasing: 46% 1H / 54% 2H
  

Strategic Intent to Spin Off Mission Technology Solutions
On September 24, 2025, KBR announced its intention to spin off its Mission Technology Solutions segment into a separate, U.S. publicly traded company. Upon completion, KBR and its shareholders are expected to benefit from ownership in two pure‑play public companies with enhanced strategic focus, operational independence, and financial flexibility.

In connection with the planned separation, certain perimeter changes were implemented in fiscal 2026 to better align the businesses ahead of the spin‑off, including the transition of Frazer‑Nash Consultancy and the UK Civil Nuclear portfolio to Sustainable Technology Solutions. These changes will be reflected in KBR’s fiscal 2026 SEC filings. Investors are encouraged to refer to the supplemental financial information available in the Investor Relations section of KBR’s website, which has been recast to reflect these updates.

The planned spin‑off is intended to be tax‑free to KBR and its shareholders for U.S. federal income tax purposes and is targeting completion during the second half of 2026, subject to final approval by KBR’s Board of Directors and other customary conditions. Additional details regarding the spin off transaction are available on the Investor Relations section of KBR's website at investors.kbr.com/news-and-events/spin-off-information.

Conference Call Details
The company will host a conference call to discuss its fourth quarter and fiscal 2025 results on Thursday, February 26, 2026, at 7:30 a.m. Central Time. The conference call will be webcast simultaneously through the Investor Relations section of KBR’s website at investors.kbr.com. A replay of the webcast will be available shortly after the call on KBR’s website or by telephone at +1.866.813.9403, passcode: 304270.

About KBR
We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 36,000 people worldwide with customers in more than 85 countries and operations in over 28 countries. KBR is proud to work with its customers across the globe to provide technology, value-added services, and long-term operations and maintenance services to ensure consistent delivery with predictable results. At KBR, We Deliver.
Visit www.kbr.com

_{¹ As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.
² As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and Operating cash conversion are non-GAAP financial measures. All non-GAAP financial measures reflect results from continuing operations.  See additional information at the end of this release regarding non-GAAP financial information, including reconciliations to the nearest GAAP measures. Trailing-twelve months (TTM) Adjusted EBITDA.
³ Net debt refers to total gross debt before unamortized debt issuance costs and discounts, less cash and cash equivalents.}

Forward-Looking Statements
The statements in this press release that are not historical statements, including statements regarding our expectations for our future financial performance, effective tax rate, operating cash flows, contract revenues, award activity and backlog, program activity, our business strategy, business opportunities, interest expense, our plans for raising and deploying capital and paying dividends, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company’s control that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: uncertainty, delays or reductions in government funding, appropriations and payments, including as a result of continuing resolution funding mechanisms, government shutdowns or changing budget priorities; developments and changes in government laws, regulations and regulatory requirements and policies that may require us to pause, delay or abandon new and existing projects; changes in the priorities, focus, authority and budgets of government agencies under the current administration that may impact our existing projects and/or our ability to win new contracts; the ongoing conflict between Russia and Ukraine and global volatility and continued unrest, including in the Middle East and Venezuela, and the related impacts on our business; potential adverse economic and market conditions, such as interest rate and currency exchange rate fluctuations, or impacts of newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or other changes in trade policy, including impact tariffs could have on customer spend; the company’s ability to manage its liquidity; delays, cancellations or reversals of contract awards due to bid protests or legal challenges; the potential adverse outcome of and the publicity surrounding audits and investigations by domestic and foreign government agencies and legislative bodies; changes in capital spending by the company’s customers; the company’s ability to obtain contracts from existing and new customers and perform under those contracts; structural changes in the industries in which the company operates; escalating costs associated with and the performance of fixed-fee projects and the company’s ability to control its cost under its contracts; claims negotiations and contract disputes with the company’s customers; changes in the demand for or price of oil and/or natural gas; protection of intellectual property rights; compliance with environmental laws; compliance with laws related to income taxes including compliance with the reconciliation bill H.R. 1; unsettled political conditions, war and the effects of terrorism; foreign operations and foreign exchange rates and controls; the development and installation of financial systems; the possibility of cyber and malware attacks; increased competition for employees; the ability to successfully complete and integrate acquisitions; the company's proposed spin off; investment decisions by project owners; and operations of joint ventures, including joint ventures that are not controlled by the company.

The company's most recently filed Annual Report on Form 10-K, any subsequent 8-Ks, and other U.S. Securities and Exchange Commission (SEC) filings discuss some of the important risk factors that the company has identified that may affect its business, results of operations and financial condition. Except as required by law, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

For further information, please contact:

¹ See additional information at the end of this release regarding non-GAAP financial information, including a reconciliation to the nearest GAAP measure

Unaudited Non-GAAP Financial Information
The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.

Adjusted EBITDA
We evaluate performance based on Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA is defined as Net income (loss) attributable to KBR, plus Net (income) loss from discontinued operations, net of tax; less Net income (loss) attributable to noncontrolling interest included in discontinued operations; less Interest expense; Other non-operating expense (income); Provision for income taxes; Depreciation and amortization; and certain discrete items as identified by Management to be non-recurring in nature as set forth below. Adjusted EBITDA can also be defined as Operating income less Net income attributable to noncontrolling interests from continuing operations; plus Depreciation and amortization; and certain discrete items as identified by Management to be non-recurring in nature as set forth below. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenues. Adjusted EBITDA and Adjusted EBITDA margin for each of the three- and twelve-month periods ended January 2, 2026 and January 3, 2025 are considered non-GAAP financial measures under SEC rules because Adjusted EBITDA excludes certain amounts included in the calculation of Net income (loss) attributable to KBR in accordance with GAAP for such periods. Management believes Adjusted EBITDA and Adjusted EBITDA margin afford investors a view of what management considers KBR's core performance for each of the three- and twelve-month periods ended January 2, 2026 and January 3, 2025 and also affords investors the ability to make a more informed assessment of such core performance for the comparable periods.

Adjusted EPS
Adjusted earnings per share (Adjusted EPS) for each of the three- and twelve-month periods ended January 2, 2026 and January 3, 2025 is considered a non-GAAP financial measure under SEC rules because Adjusted EPS excludes certain amounts included in the Diluted EPS calculated in accordance with GAAP for such periods. The most directly comparable financial measure calculated in accordance with GAAP is Diluted EPS for the same periods. Management believes that Adjusted EPS affords investors a view of what management considers KBR's core earnings performance for each of the three- and twelve-month periods ended January 2, 2026 and January 3, 2025 and also affords investors the ability to make a more informed assessment of such core earnings performance for the comparable periods.

Operating Cash Conversion

Operating cash conversion is considered a non-GAAP financial measure under SEC rules. Operating cash conversion is calculated as Operating cash flows from continuing operations divided by Adjusted weighted average common shares outstanding, which is then divided by Adjusted earnings per share. Management believes that Operating cash conversion affords investors a view of what management considers KBR's core operating cash flow performance for each of the three- and twelve-month periods ended January 2, 2026 and January 3, 2025 and also afford investors the ability to make a more informed assessment of such core operating cash generation performance.