Amentum (AMTM -0.72%), a leading provider of engineering, technical, and mission support services to government and commercial customers, reported results for Q3 FY2025 on August 5, 2025. The earnings release highlighted record GAAP revenue of $3,561 million, fueled by last year's Jacobs CMS acquisition, stronger-than-expected profits (non-GAAP) as it progressed on portfolio streamlining and debt reduction. Revenue (GAAP) came in at $3.56 billion, outpacing the consensus GAAP estimate of $3.51 billion. Non-GAAP earnings per share stood at $0.56, above the $0.53 analyst target (non-GAAP). With management raising its FY2025 non-GAAP guidance for revenue, profit, and free cash flow, The period showed solid execution and positioned Amentum to benefit from a record $44.6 billion backlog.
| Metric | Q3 2025 | Q3 2025 Estimate | Q3 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.56 | $0.53 | $0.51 | 10% |
| Revenue (GAAP) | $3.56 billion | $3.51 billion | $2.14 billion | 66% |
| Revenue (Non-GAAP) | $3.56 billion | $3.51 billion | $3.49 billion | 2.0% |
| Adjusted EBITDA (Non-GAAP) | $274 million | $257 million | 7% | |
| Free Cash Flow (Non-GAAP) | $100 million | N/A | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.
Amentum’s Business and Focus Areas
Amentum operates as a broad technical solutions provider for complex government missions, specializing in engineering, advanced digital solutions, and mission support. It serves U.S. federal agencies, international governments, and commercial clients in sectors such as defense, intelligence, space, energy, and environmental cleanup.
Following its merger with Jacobs’ Critical Mission Solutions (CMS) business, Amentum has focused on building scale and deepening technical expertise. Strategic priorities center on digital modernization, energy transition, and space operations. Strong contract backlog, proven capabilities across high-demand markets, and a capital-light service model are the company's main success factors.
Quarter in Review: Results, Operations, and Segment Performance
Amentum reported a significant 66% increase in GAAP revenue to $3.56 billion. This step up reflects the recent Jacobs CMS acquisition, which reshaped the company's reporting base. On a comparable (pro forma) basis, revenue rose 2% year over year. Non-GAAP earnings per share climbed to $0.56, a 10% increase from the prior year’s $0.51, and surpassed expectations by $0.03 on a non-GAAP basis. Adjusted EBITDA rose 7% to $274 million, with the company’s adjusted EBITDA margin expanded by 30 basis points to 7.7% (non-GAAP).
Profitability also saw improvement. Net income (GAAP) reached $10 million, reversing a GAAP net loss of $26 million in Q3 FY2024. Operating income (GAAP) moved up to $103 million from $89 million, a rise of 16% year over year. Free cash flow was $100 million, while operating cash flow totaled $106 million—both supporting further voluntary debt reduction and strengthening liquidity.
Segment trends were mixed. The Digital Solutions segment—which provides advanced IT services, modernization, and automation for government and commercial clients—delivered revenue growth of 12% year over year to $1.42 billion (pro forma, non-GAAP). Adjusted EBITDA increased 21% to $114 million, driven by the ramp-up of new commercial awards and better operational performance. In contrast, the Global Engineering Solutions segment—which delivers large-scale engineering, maintenance, and mission support for defense, energy, and infrastructure programs—saw pro forma revenue contract 3% to $2.14 billion, with a modest 2% decline in Adjusted EBITDA to $160 million. These declines stemmed from ramp-downs in legacy programs, which were only partially offset by new contract wins.
A key highlight for the period was continued progress in portfolio streamlining. Amentum closed the sale of its Rapid Solutions hardware and products business for $360 million, and a small New Zealand maintenance subsidiary. The funds enabled $200 million of voluntary debt paydowns and a further $250 million after quarter-end. Net leverage (non-GAAP) improved from 4.1x at FY2024 year-end to 3.5x, though gross debt remains high at $4.6 billion.
The company secured significant contracts in intelligence, space, and nuclear energy. Notable new business included over $500 million in intelligence task orders, a multiyear U.S. Space Force Range contract (potentially worth $4 billion over a ten-year ordering period, currently under protest), and a large-scale partnership for management of Canada’s national nuclear laboratories. Backlog increased to $44.6 billion, representing more than 3.2 times projected annual revenue for FY2025. The book-to-bill ratio—a measure of how new orders compare to revenue—stood at 1.0 year to date through Q2 FY2025.
AMTM does not currently pay a dividend.
Looking Ahead: Guidance, Risks, and Investor Focus
Management now projects revenue between $14.15 and $14.175 billion, an upward revision of approximately $162.5 million at the midpoint from prior guidance. Adjusted EBITDA (non-GAAP) guidance is $1.065–$1.095 billion, and Non-GAAP Adjusted Diluted EPS is expected at $2.20, lifted from earlier targets. Free cash flow (non-GAAP) is forecast in the range of $475 million to $525 million.
Management emphasized that approximately 98% of revenue is expected to come from existing contracts or renewals, with only about 2% dependent on new business. A backlog of $44.6 billion and $29 billion in pending awards provide confidence in revenue visibility. However, risks remain from the high debt load, pockets of slower growth in legacy segments, and continued reliance on U.S. government budgets. The company is exposed to government appropriations timing and potential contract award delays, which could affect quarterly variability.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
