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01/11 03:09
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reveals strong financial performance, including a 13% revenue increase and a 27% rise in adjusted EPS. The strategic acquisition of LinQuest and significant contracts bolster future growth. The dividend increase and substantial share buybacks reflect confidence in the company's outlook. While there are competitive pressures and energy transition challenges, the management's focus on defense aligns with the new budget, and guidance remains optimistic. The Q&A section supports a positive outlook, with expectations for resolution of award protests and increased LNG activity.
Revenue $2.1 billion, up 13% year-over-year, driven by growth across both segments and the LinQuest acquisition.
Adjusted EBITDA $243 million, up 17% year-over-year, with margins at 11.8%, an increase of 40 basis points, primarily due to strong performance in STS.
Adjusted EPS $0.98, up 27% year-over-year, driven by a lower share count from repurchases made over the last year.
Operating Cash Flow $98 million, an increase of 8% year-over-year, with Q1 typically being a lower cash flow quarter seasonally.
MTS Revenue $1.5 billion, up 14% year-over-year, with adjusted EBITDA of $145 million, up 11%.
STS Revenue $550 million, up 12% year-over-year, with adjusted EBITDA of $124 million, up 20%, supported by strong performance from the Plaquemines LNG project.
Net Leverage 2.6 times, in line with last quarter.
Buybacks Exceeded $150 million in Q1, one of the largest amounts of buybacks in a quarter, reflecting high confidence in outlook.
HomeSafe: The HomeSafe contract ramped during Q1, with significant operational improvements and rising customer satisfaction. Expected modest growth in Q2 with incremental increases in Q3 and Q4.
Ascent 2: KBR won the Ascent 2 award with the US Space Force, valued at $970 million, providing digital engineering and decision support capabilities.
ASTRO: KBR secured a $176 million contract with the Air Force Research Laboratory for advanced space technology research.
Small Modular Reactor (SMR): KBR is developing its first SMR project in Wyoming, with plans for further deployments into the 2030s.
LNG Exports: The Plaquemines project is progressing well, with LNG exports on or ahead of schedule, contributing to strong financial performance.
International Projects: KBR is seeing a growing pipeline of LNG and energy security projects, with significant wins in the global South, including the UAE, Saudi Arabia, Iraq, and Indonesia.
Safety Performance: KBR achieved a record low total recordable incident rate of 0.05 in 2024, with a 98% Zero Harm day rate thus far in 2025.
Financial Performance: Q1 revenues were $2.1 billion, up 13% year-over-year, with adjusted EBITDA of $243 million, up 17%.
Capital Allocation: KBR is returning record levels of capital to shareholders through buybacks and dividends, with over $150 million in buybacks in Q1.
Growth Strategy: KBR is executing a growth strategy with increased bid volumes and a balanced, resilient business portfolio.
Economic Factors: KBR acknowledges that while they are not fully immune to an economic slowdown, they believe they are well positioned due to their diversified global mix of business and their role as a provider of mission-critical services.
Regulatory Issues: KBR has limited exposure to US federal civilian budgets outside of NASA, which has been the primary focus of efficiency reductions. They do not have material exposure to the science efforts under scrutiny.
Supply Chain Challenges: KBR does not import or export products significantly and does not procure raw materials or manufacture in China. However, they are monitoring potential impacts from tariffs that could affect client CapEx budgets.
Competitive Pressures: KBR faces a competitive environment in the military space market, where they successfully displaced an incumbent for a significant contract, indicating ongoing competitive pressures.
Project Cancellations: KBR has not experienced direct impacts from project cancellations due to government efficiency initiatives, indicating a stable project pipeline.
Geopolitical Risks: KBR is monitoring the level of troop support in Eastern Europe, which could impact their operations, although they have not observed significant effects at this time.
Safety Performance: KBR achieved a record low total recordable incident rate of 0.05 in 2024, with a 98% Zero Harm day rate thus far in 2025.
Growth Strategy Execution: KBR is methodically executing its growth strategy, with increased bid volumes and successful contract wins, including a $970 million contract with the US Space Force.
Contract Wins: KBR secured several contracts, including an $85 million contract for airfield repair kits and a $229 million contract for US Army cargo helicopter systems.
Integration of LinQuest: Integration of LinQuest is substantially complete, realizing synergies and enhancing competitive positioning.
Sustainable Technology Solutions: KBR is expanding its portfolio in sustainable technology, including a partnership with TerraPower for Small Modular Reactors.
Revenue Guidance: KBR expects revenue for fiscal 2025 to be between $8.7 billion and $9.1 billion.
Adjusted EBITDA Guidance: Adjusted EBITDA is expected to be between $950 million and $990 million.
Adjusted EPS Guidance: Adjusted earnings per share is projected to be between $3.71 and $3.95.
Operating Cash Flow Guidance: Operating cash flows are expected to be between $500 million and $550 million.
HomeSafe Revenue Contribution: Estimated revenue contribution from HomeSafe is projected to be between $300 million and $500 million for 2025.
Dividend Increase: KBR has increased its dividend, which took effect in March.
Share Buybacks: KBR executed share buybacks exceeding $150 million in Q1 2025, one of the largest amounts in a quarter, reflecting high confidence in the company's outlook.
Remaining Share Repurchase Authorization: KBR has approximately $600 million remaining under its share repurchase authorization.
The earnings call presents mixed signals: revenue guidance was lowered, but EBITDA and cash flow targets remain unchanged. The STS segment shows potential growth, particularly in LNG projects, and there are opportunities in defense spending. However, uncertainties in NASA funding and strategic shifts in the MTS segment present risks. The Q&A reveals optimism for 2026, but concerns about budget pressures and unresolved protests. The market reaction is likely to be neutral, balancing positive prospects in defense and energy with revenue guidance cuts and NASA uncertainties.
The earnings call presents a mixed picture: strong financial performance with revenue and EBITDA growth, but uncertainties like NASA funding and protest delays. The Q&A reveals confidence in future targets but lacks concrete evidence. Shareholder returns are positive, yet HomeSafe losses and geopolitical risks weigh down sentiment. Overall, the market may react with caution, resulting in a neutral stock price movement.
The earnings call summary reveals strong financial performance, including a 13% revenue increase and a 27% rise in adjusted EPS. The strategic acquisition of LinQuest and significant contracts bolster future growth. The dividend increase and substantial share buybacks reflect confidence in the company's outlook. While there are competitive pressures and energy transition challenges, the management's focus on defense aligns with the new budget, and guidance remains optimistic. The Q&A section supports a positive outlook, with expectations for resolution of award protests and increased LNG activity.
The earnings call summary reveals strong financial performance, with revenue, EBITDA, and EPS showing significant year-over-year growth. The Q&A section highlights confidence in backlog growth and defense budget alignment, despite some energy transition delays. The increased dividend and substantial share buybacks indicate a positive shareholder return plan. While there are uncertainties in troop support and LNG project timelines, the company's strategic acquisitions and partnerships, along with optimistic guidance, suggest a positive outlook. These factors collectively point to a likely stock price increase in the short term.
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