Amentum’s fourth quarter was marked by a significant revenue decline, missing Wall Street’s expectations due to the impacts of a prolonged U.S. government shutdown and contract transitions. Management acknowledged that these factors, alongside divestitures, led to a challenging revenue environment. CEO John Heller described the quarter as a period where “the longest government shutdown in history impacted performance,” but noted that teams remained focused on delivering for customers. The company’s robust margin performance was attributed to prioritizing higher-margin contracts and disciplined cost control. Despite these operational positives, the market responded negatively to the revenue shortfall and the company’s outlook for modest growth.
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Amentum (AMTM) Q4 CY2025 Highlights:
- Revenue: $3.24 billion vs analyst estimates of $3.32 billion (5.2% year-on-year decline, 2.5% miss)
- EPS (GAAP): $0.18 vs analyst estimates of $0.17 (in line)
- Adjusted EBITDA: $263 million vs analyst estimates of $256 million (8.1% margin, 2.8% beat)
- The company reconfirmed its revenue guidance for the full year of $14.13 billion at the midpoint
- EBITDA guidance for the full year is $1.12 billion at the midpoint, in line with analyst expectations
- Operating Margin: 3.6%, in line with the same quarter last year
- Backlog: $47.2 billion at quarter end
- Market Capitalization: $7.56 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Amentum’s Q4 Earnings Call
- Colin Canfield (Cantor): asked about the timing of free cash flow recovery and the impact of receivables management. CFO Travis Johnson explained that Q1 cash shortfalls were timing-related and expects a rebound in coming quarters.
- Tobey Sommer (Truist): inquired about the margin potential from nuclear contracts. CEO John Heller noted that nuclear awards will impact annual, not quarterly, performance due to long project timelines.
- Seth Seifman (JPMorgan): questioned the sustainability of recent margin improvements in Global Engineering Solutions. Johnson attributed gains to a mix of higher-margin work and synergy realization, but expects variability across the year.
- Kristine Liwag (Morgan Stanley): asked if Amentum’s expertise in nuclear projects translates to other large power infrastructure. Heller emphasized that the company is focused on nuclear but is aware of broader energy infrastructure trends.
- Mariana Perez Mora (Bank of America): inquired about the timing and scope of the Golden Dome Shield contract awards. Heller stated that current work aligns with future opportunities, with increased activity expected next year.
Catalysts in Upcoming Quarters
In the coming quarters, our team will monitor (1) the conversion of large nuclear and space-related contract wins into revenue, (2) the progression of margin improvements tied to higher-margin work and fixed price contracts, and (3) the pace of new business awards from the company’s extensive backlog. Execution in digital infrastructure and continued resilience against government funding disruptions will also be critical for sustained growth.
Amentum currently trades at $31.18, down from $36.59 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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