UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended June 27, 2025
or
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from to
Commission File Number: 001-42176
Amentum Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 99-0622272 | ||||
| (State or other jurisdiction of | (I.R.S. Employer | ||||
| incorporation or organization) | Identification No.) | ||||
4800 Westfields Blvd., Suite #400
Chantilly, Virginia 20151
(Address of principal executive offices)
(703) 579-0410
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, par value $0.01 per share | AMTM | New York Stock Exchange | ||||||
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes þ No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | Accelerated filer | o | ||||||||
| Non-accelerated filer | þ | Smaller reporting company | o | ||||||||
| Emerging growth company | o | ||||||||||
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
As of August 1, 2025, there were 243,328,645 shares outstanding of Amentum Holdings, Inc. common stock, par value of $0.01 per share.
AMENTUM HOLDINGS, INC.
3
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
AMENTUM HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except per share data)
See notes to unaudited condensed consolidated financial statements
4
AMENTUM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in millions, except per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | ||||||||||||||||||||
| Revenues | $ | 3,561 | $ | 2,142 | $ | 10,468 | $ | 6,176 | |||||||||||||||
| Cost of revenues | (3,193) | (1,936) | (9,372) | (5,576) | |||||||||||||||||||
| Selling, general, and administrative expenses | (165) | (77) | (440) | (216) | |||||||||||||||||||
| Amortization of intangibles | (118) | (57) | (358) | (171) | |||||||||||||||||||
| Equity earnings of non-consolidated subsidiaries | 18 | 17 | 47 | 51 | |||||||||||||||||||
| Operating income | 103 | 89 | 345 | 264 | |||||||||||||||||||
| Interest expense and other, net | (88) | (108) | (261) | (330) | |||||||||||||||||||
| Loss on extinguishment of debt | (3) | (3) | (3) | (3) | |||||||||||||||||||
| Income (loss) before income taxes | 12 | (22) | 81 | (69) | |||||||||||||||||||
| Provision for income taxes | (13) | (2) | (59) | (36) | |||||||||||||||||||
| Net income (loss) including non-controlling interests | (1) | (24) | 22 | (105) | |||||||||||||||||||
| Less: net income (loss) attributable to non-controlling interests | 11 | (2) | 4 | (3) | |||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 10 | $ | (26) | $ | 26 | $ | (108) | |||||||||||||||
| Earnings (loss) per share: | |||||||||||||||||||||||
| Basic | $ | 0.04 | $ | (0.29) | $ | 0.11 | $ | (1.20) | |||||||||||||||
| Diluted | $ | 0.04 | $ | (0.29) | $ | 0.11 | $ | (1.20) | |||||||||||||||
See notes to unaudited condensed consolidated financial statements
5
AMENTUM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(in millions)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | ||||||||||||||||||||
| Net income (loss) including non-controlling interests | $ | (1) | $ | (24) | $ | 22 | $ | (105) | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Net unrealized gain (loss) on interest rate swaps | — | 3 | 15 | (11) | |||||||||||||||||||
| Foreign currency translation adjustments | 15 | — | 8 | 4 | |||||||||||||||||||
| Pension adjustments | (1) | (1) | (1) | (2) | |||||||||||||||||||
| Other comprehensive income (loss) | 14 | 2 | 22 | (9) | |||||||||||||||||||
| Income tax (provision) benefit related to items of other comprehensive income (loss) | — | — | (2) | 2 | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | 14 | 2 | 20 | (7) | |||||||||||||||||||
| Comprehensive income (loss) | 13 | (22) | 42 | (112) | |||||||||||||||||||
| Net income (loss) attributable to non-controlling interests | 11 | (2) | 4 | (3) | |||||||||||||||||||
| Comprehensive income (loss) attributable to common shareholders | $ | 24 | $ | (24) | $ | 46 | $ | (115) | |||||||||||||||
See notes to unaudited condensed consolidated financial statements
6
AMENTUM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
(in millions)
| Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Income | Total Shareholders' Equity Attributable to Amentum Holdings, Inc. | Non-controlling Interests | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 28, 2025 | 243 | $ | 2 | $ | 4,907 | $ | (511) | $ | 29 | $ | 4,427 | $ | 152 | $ | 4,579 | ||||||||||||||||||||||||||||||||
| Net income (loss) including non-controlling interests | — | — | — | 10 | — | 10 | (11) | (1) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 14 | 14 | — | 14 | |||||||||||||||||||||||||||||||||||||||
| Measurement period adjustments | — | — | — | — | — | — | (9) | (9) | |||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | — | — | — | 1 | 1 | |||||||||||||||||||||||||||||||||||||||
| Equity based compensation and other | — | — | 7 | — | — | 7 | (2) | 5 | |||||||||||||||||||||||||||||||||||||||
| Balance at June 27, 2025 | 243 | $ | 2 | $ | 4,914 | $ | (501) | $ | 43 | $ | 4,458 | $ | 131 | $ | 4,589 | ||||||||||||||||||||||||||||||||
| Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Income | Total Shareholders' Equity Attributable to Amentum Holdings, Inc. | Non-controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||
| Balance at March 29, 2024 | $ | 776 | $ | (527) | $ | 39 | $ | 288 | $ | 36 | $ | 324 | |||||||||||||||||||||||
| Net loss including non-controlling interests | — | (26) | — | (26) | 2 | (24) | |||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | 2 | 2 | — | 2 | |||||||||||||||||||||||||||||
| Equity based compensation and other | 1 | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||
| Balance at June 28, 2024 | $ | 777 | $ | (553) | $ | 41 | $ | 265 | $ | 38 | $ | 303 | |||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Income | Total Shareholders' Equity Attributable to Amentum Holdings, Inc. | Non-controlling Interests | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 27, 2024 | 243 | $ | 2 | $ | 4,962 | $ | (527) | $ | 23 | $ | 4,460 | $ | 92 | $ | 4,552 | ||||||||||||||||||||||||||||||||
| Net income including non-controlling interests | — | — | — | 26 | — | 26 | (4) | 22 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 20 | 20 | — | 20 | |||||||||||||||||||||||||||||||||||||||
| Measurement period adjustments | — | — | (63) | — | — | (63) | 66 | 3 | |||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | — | — | — | (21) | (21) | |||||||||||||||||||||||||||||||||||||||
| Equity based compensation and other | — | — | 15 | — | — | 15 | (2) | 13 | |||||||||||||||||||||||||||||||||||||||
| Balance at June 27, 2025 | 243 | $ | 2 | $ | 4,914 | $ | (501) | $ | 43 | $ | 4,458 | $ | 131 | $ | 4,589 | ||||||||||||||||||||||||||||||||
| Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Income | Total Shareholders' Equity Attributable to Amentum Holdings, Inc. | Non-controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||
| Balance at September 29, 2023 | $ | 772 | $ | (445) | $ | 48 | $ | 375 | $ | 41 | $ | 416 | |||||||||||||||||||||||
| Net (loss) income including non-controlling interests | — | (108) | — | (108) | 3 | (105) | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | (7) | (7) | — | (7) | |||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | — | (2) | (2) | |||||||||||||||||||||||||||||
| Equity based compensation and other | 5 | — | — | 5 | (4) | 1 | |||||||||||||||||||||||||||||
| Balance at June 28, 2024 | $ | 777 | $ | (553) | $ | 41 | $ | 265 | $ | 38 | $ | 303 | |||||||||||||||||||||||
See notes to unaudited condensed consolidated financial statements
7
AMENTUM HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
| Nine Months Ended | |||||||||||
| June 27, 2025 | June 28, 2024 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net income (loss) including non-controlling interests | $ | 22 | $ | (105) | |||||||
| Adjustments to reconcile net income (loss) including non-controlling interests to net cash provided by operating activities: | |||||||||||
| Depreciation | 29 | 17 | |||||||||
| Amortization of intangibles | 358 | 171 | |||||||||
| Amortization of deferred loan costs and original issue discount | 8 | 16 | |||||||||
| Derivative instruments | 8 | 34 | |||||||||
| Equity earnings of non-consolidated subsidiaries | (47) | (51) | |||||||||
| Distributions from equity method investments | 57 | 46 | |||||||||
| Deferred income taxes | (44) | (17) | |||||||||
| Equity-based compensation | 15 | 3 | |||||||||
| Other | 3 | 6 | |||||||||
| Changes in assets and liabilities, net of effects of business acquisition: | |||||||||||
| Accounts receivable, net | (154) | 29 | |||||||||
| Prepaid expenses and other assets | 75 | 69 | |||||||||
| Accounts payable, contract liabilities, and other current liabilities | (28) | (111) | |||||||||
| Accrued employee compensation and benefits | (9) | 57 | |||||||||
| Other long-term liabilities | (20) | (4) | |||||||||
| Net cash provided by operating activities | 273 | 160 | |||||||||
| Cash flows from investing activities | |||||||||||
| Acquisitions, net of cash acquired | (70) | — | |||||||||
| Divestitures, net of cash conveyed | 358 | — | |||||||||
| Payments for property and equipment | (18) | (7) | |||||||||
| Contributions to equity method investments | (36) | — | |||||||||
| Other | 2 | (1) | |||||||||
| Net cash provided by (used in) investing activities | 236 | (8) | |||||||||
| Cash flows from financing activities | |||||||||||
| Borrowings on revolving credit facilities | 858 | 562 | |||||||||
| Payments on revolving credit facilities | (858) | (562) | |||||||||
| Repayments of borrowings under the credit agreement | (200) | (175) | |||||||||
| Repayments of borrowings under other agreements | (7) | (10) | |||||||||
| Distributions to non-controlling interests | (21) | (2) | |||||||||
| Other | (3) | (2) | |||||||||
| Net cash used in financing activities | (231) | (189) | |||||||||
| Effect of exchange rate changes on cash | 8 | 3 | |||||||||
| Net change in cash and cash equivalents | 286 | (34) | |||||||||
| Cash and cash equivalents, beginning of period | 452 | 305 | |||||||||
| Cash and cash equivalents, end of period | $ | 738 | $ | 271 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Common stock issued for the Transaction | $ | (63) | $ | — | |||||||
| Income taxes paid, net of receipts | (67) | (45) | |||||||||
| Interest paid | (194) | (275) | |||||||||
See notes to unaudited condensed consolidated financial statements
8
AMENTUM HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 — Basis of Presentation
Amentum Holdings, Inc. (collectively with its subsidiaries, “we,” “us,” “our,” “Amentum,” or the “Company”) is a global advanced engineering and technology solutions provider to a broad base of U.S. and allied government agencies, supporting programs of critical national importance across energy and environmental, intelligence, space, defense, civilian and commercial end-markets. We offer a broad reach of capabilities including intelligence and counter threat solutions, data fusion and analytics, engineering and integration, environmental solutions, advanced test, training and readiness, and citizen solutions. As a leading provider of differentiated technology solutions, we have built a repertoire of deep customer knowledge, enabling us to engage our customers across multiple capabilities and markets.
During the first quarter of fiscal year 2025, we announced the realignment of our reporting structure, which resulted in the identification of two reportable segments: Digital Solutions (“DS”) and Global Engineering Solutions (“GES”). The DS segment provides advanced digital and data-driven solutions including intelligence analytics, space system development, cybersecurity, and next generation IT across the federal government and commercial clients. The GES segment provides large-scale environmental remediation, clean energy, platform engineering, sustainment and supply chain management across all seven continents for the U.S. government and allied nations. As a result of this change, prior year segment disclosures have been recast to reflect the current reportable segment structure.
On September 27, 2024, the spin-off of the Jacobs Solutions Inc. (“Jacobs”) Critical Mission Solutions business and portions of the Jacobs Divergent Solutions business (and, together with the Critical Mission Solutions business, referred to as the “CMS Business” or “CMS”) merged with Amentum Parent Holdings LLC (collectively, the “Transaction”) with the surviving entity renamed Amentum Holdings, Inc.
Amentum Parent Holdings LLC is considered the Company’s predecessor, and the historical financial statements of Amentum Parent Holdings LLC prior to September 27, 2024 are reflected in this Quarterly Report on Form 10-Q as the Company’s historical financial statements. Accordingly, the financial results of the Company prior to September 27, 2024 do not include the financial results of CMS, and current and future results will not be comparable to historical results.
The accompanying unaudited condensed consolidated financial statements of the Company include the assets, liabilities, results of operations, comprehensive income (loss) and cash flows for the Company, including its wholly-owned subsidiaries and joint ventures that are majority-owned or otherwise controlled by the Company. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, although the Company believes that the disclosures made are adequate to make the information presented not misleading. All intercompany transactions and balances have been eliminated in consolidation.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for the fair presentation of the periods presented. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest annual report for the fiscal year ended September 27, 2024. The results of operations for the three and nine months ended June 27, 2025 are not necessarily indicative of the results to be expected for any subsequent interim period or for the full fiscal year.
Note 2 — Recent Accounting Pronouncements
Accounting Standards Updates Issued but Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements. This update requires disclosure of significant segment expenses and other segment items in annual and interim periods. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendment requires retrospective application to all prior periods presented in the financial statements, and early adoption is permitted. We are currently evaluating the impacts of the new standard on our consolidated financial statements.
9
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance transparency and usefulness of income tax disclosures. This update requires disaggregated information about an entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be applied on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impacts of the new standard on our financial statement disclosures.
Note 3 — Acquisition and Divestiture
Acquisition of CMS
On September 27, 2024, the Company completed its merger with CMS, a leading provider of mission-critical, technology-driven services in government and commercial markets, in a Reverse Morris Trust transaction. Immediately following the Transaction, the Company had approximately 243 million issued and outstanding shares of common stock, of which Jacobs and its shareholders (“CMS Shareholders”) owned 58.5% of the issued and outstanding shares of common stock, and Amentum Joint Venture LP, our previous parent company (“AJVLP” and “Amentum Equityholder”) owned 37.0%. Subsequently, Amentum Equityholder distributed its shares of our common stock to certain parties (collectively, “Sponsor Stockholder”). Further, 4.5% of the issued and outstanding shares of common stock was placed in escrow at the merger date, to be released and delivered in the future to CMS Shareholders or to Amentum Equityholder, depending on the achievement of certain fiscal year 2024 targets by the CMS Business (“Additional Merger Consideration”). In March 2025, the Company and Jacobs finalized the Additional Merger Consideration and released all 4.5% of the issued and outstanding shares of common stock out of escrow with 3.5% of the issued and outstanding shares released to CMS Shareholders and the remaining 1.0% of issued and outstanding shares to the Sponsor Stockholder.
Under the acquisition method of accounting, total consideration exchanged for the CMS transaction is shown below and increased $7 million from September 27, 2024:
| (In millions, except per share amounts) | ||||||||
| Shares of Amentum Holdings, Inc. common stock issued to CMS shareholders | 142 | |||||||
| Per share price of Amentum Holdings, Inc. common stock | 25.67 | |||||||
Fair value of common stock issued to CMS shareholders (1) | 3,654 | |||||||
Fair value of additional equity consideration issued to CMS shareholders (2) | 218 | |||||||
Final working capital settlement (3) | 70 | |||||||
Other consideration (4) | 6 | |||||||
| Fair value of consideration transferred | 3,948 | |||||||
Fair value of previously held equity interest (5) | 84 | |||||||
| Total consideration | $ | 4,032 | ||||||
(1) Represents the fair value of equity consideration received by CMS Shareholders to provide 58.5% ownership in the Company.
(2) Represents the Additional Equity Consideration which was finalized in March 2025. The balance reflects a decrease in equity consideration issued to CMS Shareholders following a resolution to release an additional 1.0% of the issued and outstanding shares of Amentum common stock back to Sponsor Stockholder. This balance is presented at fair value based on the acquisition-date share price and is included in the total purchase consideration in accordance with ASC 805.
(3) Reflects a $70 million cash payment made based on the final net working capital position. This payment was made in the third quarter of fiscal year 2025 and is included in the total purchase consideration in accordance with ASC 805, as it represents an obligation attributable to pre-acquisition activities.
(4) Represents other immaterial adjustments, including a) estimated equity consideration related to pre-combination share-based compensation awards, b) the settlement of CMS transaction costs paid by Amentum, and c) the removal of consideration related to the acquisition of non-controlling interests.
(5) Prior to the Transaction, we held a non-controlling interest in a joint venture of 50% which was accounted for under the equity method of accounting, with the remaining 40% held by the CMS Business and 10% held by an unrelated third party. As a result of the Transaction, the Company gained a controlling financial interest in the joint venture and it became a consolidated joint venture of the Company. This joint venture acquisition was accounted for as a business combination achieved in stages. Our pre-existing equity method investment in the joint venture was remeasured at an acquisition date fair value of $170 million by using a discounted cash flow model based on estimated future revenues, margins and discount rates, among other variables and estimates. Additionally, as of the acquisition date, the Company had a payable to the joint venture with a fair value of $1 million that was settled in connection with the acquisition.
The Transaction was accounted for as a business combination. The Company assessed the fair value of the identifiable intangible assets including customer relationships and backlog, which were valued using the excess earnings method of the income approach. This method requires several judgments and assumptions to determine the fair value of the intangible assets including expected future cash flows, weighted-average cost of capital, discount rates, useful lives of assets and expected long-term growth rates. The goodwill recognized was attributable to the synergies expected to be achieved by combining the
10
businesses of Amentum and CMS, expected future contracts and the acquired workforce. The goodwill is partially deductible for tax purposes.
The purchase price was allocated, on a preliminary basis, to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess purchase consideration recorded as goodwill. The Company is still evaluating the determination of fair values allocated to various assets and liabilities, including, but not limited to, intangible assets, accounts receivable, other current assets, property and equipment, equity method investments and joint ventures, other long-term assets, income taxes, deferred taxes, accounts payables, other current liabilities, contract liabilities, other long-term liabilities, non-controlling interests and goodwill. The allocation of the purchase price is preliminary and subject to change as the Company continues to obtain and assess relevant information that existed as of the acquisition date, including but not limited to, information pertaining to CMS’ legal proceedings, reserves, income taxes, contracts with customers, and pre-acquisition contingencies. Additionally, in connection and in accordance with the terms of the Transaction, prior to the spin-off and Transaction, CMS provided a cash payment to Jacobs of approximately $911 million, after adjustments based on the levels of cash, debt and working capital in the CMS Business. The Company expects to have sufficient information available to resolve these items within one year of the CMS acquisition date.
The preliminary allocation of the purchase price is as follows:
(Amounts in millions) | Preliminary Allocation of Purchase Price | Measurement Period Adjustments, Net | Preliminary Adjusted Allocation of Purchase Price | |||||||||||||||||
| Cash and cash equivalents | $ | 488 | $ | — | $ | 488 | ||||||||||||||
| Accounts receivable | 1,043 | (52) | 991 | |||||||||||||||||
| Prepaid expenses and other current assets | 82 | (5) | 77 | |||||||||||||||||
| Property and equipment | 72 | (2) | 70 | |||||||||||||||||
| Equity method investments | 17 | 50 | 67 | |||||||||||||||||
| Goodwill | 2,665 | 253 | 2,918 | |||||||||||||||||
| Intangible assets | 1,860 | (55) | 1,805 | |||||||||||||||||
| Other long-term assets | 107 | 5 | 112 | |||||||||||||||||
| Current portion of long-term debt | (8) | — | (8) | |||||||||||||||||
| Accounts payable | (257) | — | (257) | |||||||||||||||||
| Accrued compensation and benefits | (285) | — | (285) | |||||||||||||||||
| Contract liabilities | (48) | (48) | (96) | |||||||||||||||||
| Other current liabilities | (98) | (133) | (231) | |||||||||||||||||
| Long-term debt, net of current portion | (1,122) | — | (1,122) | |||||||||||||||||
| Deferred tax liabilities | (353) | 79 | (274) | |||||||||||||||||
| Other long-term liabilities | (75) | (19) | (94) | |||||||||||||||||
| Non-controlling interests | (63) | (66) | (129) | |||||||||||||||||
| Total consideration | $ | 4,025 | $ | 7 | $ | 4,032 | ||||||||||||||
The estimated fair value of acquired backlog of $275 million is amortized on an accelerated basis over approximately 1 year and the estimated fair value of customer relationship intangible assets of $1,530 million is amortized on an accelerated basis over approximately 14 years. The fair value attributed to these intangible assets acquired was based on assumptions and other information compiled by management, including independent valuations that utilized established valuation techniques, and thus represents a Level 3 fair value measurement. The income approach was primarily used to value the intangible assets, consisting primarily of acquired program and contract intangibles and backlog. The income approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money.
Divestiture of Rapid Solutions
On June 26, 2025, we completed the sale of a hardware and product business, Rapid Solutions, to Lockheed Martin Corporation for a purchase price of $360 million in cash. The sale of Rapid Solutions, which was part of the DS segment, was not classified as discontinued operations as it did not represent a strategic shift in our business.
11
Note 4 — Revenues
Disaggregation of Revenues
The Company disaggregates revenues by customer, contract type, prime contractor versus subcontractor, geographic location and whether the solution provided is primarily Digital Solutions or Global Engineering Solutions. These categories represent how the nature, amount, timing, and uncertainty of revenues and cash flows are affected.
Disaggregated revenues by customer-type were as follows:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| Department of Defense and U.S. Intelligence Community | $ | 865 | $ | 1,052 | $ | 1,917 | $ | 378 | $ | 1,047 | $ | 1,425 | ||||||||||||||||||||||||||
| Other U.S. Government Agencies | 401 | 596 | 997 | 102 | 412 | 514 | ||||||||||||||||||||||||||||||||
| Commercial and International | 155 | 492 | 647 | 21 | 182 | 203 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 1,421 | $ | 2,140 | $ | 3,561 | $ | 501 | $ | 1,641 | $ | 2,142 | ||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| Department of Defense and U.S. Intelligence Community | $ | 2,325 | $ | 3,168 | $ | 5,493 | $ | 1,083 | $ | 3,029 | $ | 4,112 | ||||||||||||||||||||||||||
| Other U.S. Government Agencies | 1,222 | 1,781 | 3,003 | 284 | 1,183 | 1,467 | ||||||||||||||||||||||||||||||||
| Commercial and International | 500 | 1,472 | 1,972 | 64 | 533 | 597 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 4,047 | $ | 6,421 | $ | 10,468 | $ | 1,431 | $ | 4,745 | $ | 6,176 | ||||||||||||||||||||||||||
Disaggregated revenues by contract-type were as follows:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| Cost-plus-fee | $ | 952 | $ | 1,348 | $ | 2,300 | $ | 249 | $ | 1,032 | $ | 1,281 | ||||||||||||||||||||||||||
| Fixed-price | 336 | 481 | 817 | 160 | 444 | 604 | ||||||||||||||||||||||||||||||||
| Time-and-materials | 133 | 311 | 444 | 92 | 165 | 257 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 1,421 | $ | 2,140 | $ | 3,561 | $ | 501 | $ | 1,641 | $ | 2,142 | ||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| Cost-plus-fee | $ | 2,598 | $ | 4,117 | $ | 6,715 | $ | 684 | $ | 3,119 | $ | 3,803 | ||||||||||||||||||||||||||
| Fixed-price | 1,026 | 1,429 | 2,455 | 476 | 1,186 | 1,662 | ||||||||||||||||||||||||||||||||
| Time-and-materials | 423 | 875 | 1,298 | 271 | 440 | 711 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 4,047 | $ | 6,421 | $ | 10,468 | $ | 1,431 | $ | 4,745 | $ | 6,176 | ||||||||||||||||||||||||||
Disaggregated revenues by prime contractor versus subcontractor were as follows:
12
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| Prime contractor | $ | 1,301 | $ | 1,896 | $ | 3,197 | $ | 449 | $ | 1,483 | $ | 1,932 | ||||||||||||||||||||||||||
| Subcontractor | 120 | 244 | 364 | 52 | 158 | 210 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 1,421 | $ | 2,140 | $ | 3,561 | $ | 501 | $ | 1,641 | $ | 2,142 | ||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| Prime contractor | $ | 3,680 | $ | 5,659 | $ | 9,339 | $ | 1,275 | $ | 4,244 | $ | 5,519 | ||||||||||||||||||||||||||
| Subcontractor | 367 | 762 | 1,129 | 156 | 501 | 657 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 4,047 | $ | 6,421 | $ | 10,468 | $ | 1,431 | $ | 4,745 | $ | 6,176 | ||||||||||||||||||||||||||
Revenues by geographic location are reported by the country in which the work is performed and were as follows:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| United States | $ | 1,360 | $ | 1,327 | $ | 2,687 | $ | 428 | $ | 1,109 | $ | 1,537 | ||||||||||||||||||||||||||
| International | 61 | 813 | 874 | 73 | 532 | 605 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 1,421 | $ | 2,140 | $ | 3,561 | $ | 501 | $ | 1,641 | $ | 2,142 | ||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | |||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | DS | GES | Total | DS | GES | Total | ||||||||||||||||||||||||||||||||
| United States | $ | 3,867 | $ | 3,890 | $ | 7,757 | $ | 1,215 | $ | 3,292 | $ | 4,507 | ||||||||||||||||||||||||||
| International | 180 | 2,531 | 2,711 | 216 | 1,453 | 1,669 | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 4,047 | $ | 6,421 | $ | 10,468 | $ | 1,431 | $ | 4,745 | $ | 6,176 | ||||||||||||||||||||||||||
Changes in Estimates on Contracts
Changes in estimated contract earnings at completion using the cumulative catch-up method of accounting were recognized in revenues as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(Amounts in millions) | June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | |||||||||||||||||||
| Favorable earnings at completion adjustments | $ | 48 | $ | 19 | $ | 98 | $ | 13 | |||||||||||||||
| Unfavorable earnings at completion adjustments | (35) | (15) | (58) | (9) | |||||||||||||||||||
| Net favorable adjustments | $ | 13 | $ | 4 | $ | 40 | $ | 4 | |||||||||||||||
Impact on diluted earnings per share attributable to common shareholders (1) | $ | 0.04 | $ | 0.03 | $ | 0.13 | $ | 0.03 | |||||||||||||||
(1) The impact on diluted loss per share attributable to common shareholders is calculated using our statutory tax rate.
Remaining Performance Obligations
As of June 27, 2025, we had a remaining performance obligations balance of $9.5 billion and expect to recognize approximately 73% and 88% of the remaining performance obligations balance as revenues over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter.
13
Note 5 — Contract Balances
The Company's contract balances consisted of the following (in millions):
| As of | ||||||||||||||||||||
| Description of Contract Related Balance | Classification | June 27, 2025 | September 27, 2024 | |||||||||||||||||
| Billed and billable receivables | Accounts receivable, net | $ | 1,481 | $ | 1,378 | |||||||||||||||
| Contract assets | Accounts receivable, net | 915 | 986 | |||||||||||||||||
| Related party receivables | Accounts receivable, net | 79 | 37 | |||||||||||||||||
| Long-term contract assets | Other long-term assets | 138 | 138 | |||||||||||||||||
| Contract liabilities - deferred revenues and other contract liabilities | Contract liabilities | (147) | (113) | |||||||||||||||||
Contract assets primarily relate to accruals for reimbursable costs and fees in which our right to consideration is conditional. Long-term contract assets relate to a prior acquisition and are discussed further in Note 14 — Legal Proceedings and Commitments and Contingencies.
The Company has related party receivables due from our equity method investments, discussed further in Note 10 — Joint Ventures.
During the three and nine months ended June 27, 2025, we recognized revenues of $11 million and $84 million, respectively, compared with $5 million and $87 million of revenues during the three and nine months ended June 28, 2024, respectively, that was included in Contract liabilities as of September 27, 2024 and September 29, 2023, respectively.
Note 6 — Sales of Receivables
In March 2024, we entered into a Master Accounts Receivable Purchase Agreement (“MARPA”) with MUFG Bank, Ltd., (the “Purchaser”) for the sale of certain designated eligible U.S. Government receivables. In December 2024, the Company amended its MARPA with the Purchaser to increase the maximum amount of eligible receivables that can be sold up to a maximum amount of $400 million. Under the MARPA, the Company can sell certain eligible receivables without recourse for any U.S. Government credit risk.
The Company's MARPA activity consisted of the following (in millions):
| As of and for the Nine Months Ended | |||||||||||
| June 27, 2025 | June 28, 2024 | ||||||||||
| Beginning balance: | $ | 177 | $ | — | |||||||
| Sales of receivables | 2,886 | 727 | |||||||||
| Cash collections | (2,844) | (552) | |||||||||
Outstanding balance sold to Purchaser (1) | 219 | 175 | |||||||||
Cash collected, not remitted to Purchaser (2) | (40) | (27) | |||||||||
| Remaining sold receivables | $ | 179 | $ | 148 | |||||||
(1) For the nine months ended June 27, 2025 and June 28, 2024, the Company recorded a net cash inflow of $42 million and $175 million in its cash flows from operating activities, respectively, from sold receivables. MARPA cash flows are calculated as the change in the outstanding balance during the fiscal year.
(2) Includes the cash collected on behalf of but not yet remitted to the Purchaser as of June 27, 2025 and June 28, 2024. This balance is included in Other accrued liabilities as of the balance sheet date.
Note 7 — Goodwill and Intangible Assets
Goodwill
The table below presents changes in the carrying amount of goodwill by reportable segment for the periods presented:
14
| (Amounts in millions) | DS | GES | Total | ||||||||||||||
Balance as of September 27, 2024 | $ | 2,412 | $ | 3,144 | $ | 5,556 | |||||||||||
Measurement period adjustments (1) | 23 | 230 | 253 | ||||||||||||||
| Divestitures | (193) | — | (193) | ||||||||||||||
Balance as of June 27, 2025 | $ | 2,242 | $ | 3,374 | $ | 5,616 | |||||||||||
(1) Represents changes to goodwill resulting from measurement period adjustments recorded in fiscal year 2025 associated with the acquisition of CMS purchase price allocation.
During the first quarter of fiscal year 2025, we amended our organization structure. We performed an interim goodwill impairment test both before and after the business realignment and did not record an impairment charge as a result of the tests.
Intangible Assets
Intangible assets, net consisted of the following:
| June 27, 2025 | September 27, 2024 | ||||||||||||||||||||||||||||||||||
| (Amounts in millions) | Gross Carrying Value | Accumulated Amortization | Net | Gross Carrying Value | Accumulated Amortization | Net | |||||||||||||||||||||||||||||
| Backlog | $ | 923 | $ | (770) | $ | 153 | $ | 931 | $ | (552) | $ | 379 | |||||||||||||||||||||||
| Customer relationship intangible assets | 2,587 | (677) | 1,910 | 2,781 | (550) | 2,231 | |||||||||||||||||||||||||||||
| Capitalized software | 24 | (12) | 12 | 23 | (10) | 13 | |||||||||||||||||||||||||||||
| Total intangible assets, net | $ | 3,534 | $ | (1,459) | $ | 2,075 | $ | 3,735 | $ | (1,112) | $ | 2,623 | |||||||||||||||||||||||
Amortization expense was $118 million and $358 million for the three and nine months ended June 27, 2025, respectively, and $57 million and $171 million for the three and nine months ended June 28, 2024, respectively.
Note 8 — Income Taxes
The Company's effective tax rate was 108.3% and 72.8% for the three and nine months ended June 27, 2025, respectively, and (9.1)% and (52.2)% for the three and nine months ended June 28, 2024, respectively.
The most significant item contributing to the difference between the statutory U.S. federal corporate tax rate of 21.0% and the Company’s effective tax rate for the three and nine months ended June 27, 2025 and June 28, 2024 was an increase in the valuation allowance against the deferred tax asset related to disallowed interest expense of $18 million and $46 million, respectively, for the three and nine months ended June 27, 2025, and $8 million and $52 million, respectively, for the three and nine months ended June 28, 2024.
On July 4, 2025, the One Big, Beautiful Bill Act (“OBBBA”) was passed. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of certain tax treatments for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing the impact on our consolidated financial statements.
Note 9 — Debt
Debt consisted of the following:
15
| As of | |||||||||||
| (Amounts in millions) | June 27, 2025 | September 27, 2024 | |||||||||
| Term Loan | $ | 3,550 | $ | 3,750 | |||||||
| Senior notes | 1,000 | 1,000 | |||||||||
| Other | 10 | 17 | |||||||||
| Total debt | 4,560 | 4,767 | |||||||||
| Unamortized original issue discount and unamortized deferred financing costs | (76) | (88) | |||||||||
| Total debt, net of original issue discount and deferred financing costs | 4,484 | 4,679 | |||||||||
| Less current portion of long-term debt | (43) | (36) | |||||||||
| Total long-term debt, net of current portion | $ | 4,441 | $ | 4,643 | |||||||
As amended, the Company’s senior secured credit facility (the “Credit Facility”) consists of a seven year, $3,750 million term facility (“Term Loan”) and a five year, $850 million revolving facility (“Revolver”), including a $200 million letter of credit subfacility and a $100 million swingline subfacility.
The interest rates applicable to the Term Loan are floating interest rates equal to an Alternate Base Rate or Adjusted Term Secured Overnight Financing Rate plus an applicable margin based upon net leverage ratio. The Term Loan matures on September 27, 2031 and requires quarterly principal amortization payments of $9 million, which commenced on March 31, 2025, with the remainder of the principal thereunder being due at maturity. The Revolver matures on September 27, 2029.
In the third quarter of fiscal years 2024 and 2025, we made additional principal payments on our outstanding debt. On May 31, 2024, we made a $150 million voluntary principal payment on the previous Second Lien Tranche 1 Term Facility and on June 27, 2025, we made an approximate $191 million voluntary principal payment on the Term Loan. Additionally, on July 31, 2025, we made a $250 million voluntary principal payment on the Term Loan. On September 27, 2024, in connection with the consummation of the Transaction, we repaid all outstanding borrowings under the prior first lien term facilities and the second lien term facilities and entered into the Credit Facility.
As of June 27, 2025 and September 27, 2024, the available borrowing capacity under the Credit Facility was $769 million and $808 million, respectively, and included $81 million and $42 million, respectively, in issued letters of credit. As of June 27, 2025 and September 27, 2024, there were no amounts borrowed under the Revolver.
In August 2024, the Company completed an offering of $1,000 million in aggregate principal amount of 7.250% senior notes due August 1, 2032 (the “Senior Notes”). Interest is payable on February 1 and August 1 of each year, which commenced on February 1, 2025.
The Credit Facility and the Senior Notes are guaranteed by substantially all of our wholly owned material domestic restricted subsidiaries, subject to customary exceptions set forth in the credit agreement and indenture, respectively.
Each of the credit agreement and indenture requires us to comply with certain representations and warranties, customary affirmative and negative covenants and, in the case of the Revolver, under certain circumstances, a financial covenant. We were in compliance with all covenants as of June 27, 2025.
Cash Flow Hedges
The Company utilizes derivative financial instruments to manage interest rate risk related to its variable rate debt. The Company’s objective is to manage its exposure to interest rate movements and reduce volatility of interest expense. The Company entered into several interest rate swaps with an aggregate notional value of $1.8 billion that were designated as cash flow hedges, in which the Company will pay at the fixed rate and receive payment at a floating rate indexed to the three-month term SOFR through maturity. The swaps mature at various dates through January 31, 2027. The change in fair value of the interest rate swaps is presented within accumulated other comprehensive income on our consolidated balance sheet and subsequently reclassified into interest expense and other, net on our consolidated statements of income and comprehensive loss in the period when the hedged transaction affects earnings.
Note 10 — Joint Ventures
The Company’s joint ventures provide services to customers including program management and operations and maintenance services. Joint ventures, the combination of two or more partners, are generally formed for a specific project. Management of the joint venture is typically controlled by a joint venture executive committee, comprised of representatives from the joint
16
venture partners. The joint venture executive committee normally provides management oversight and controls decisions which could have a significant impact on the joint venture.
We account for joint ventures in accordance with ASC 810, Consolidation. The Company analyzes its joint ventures and classifies them as either:
•a Variable Interest Entity (“VIE”) that must be consolidated because the Company is the primary beneficiary or the joint venture is not a VIE and the Company holds the majority voting interest with no significant participative rights available to the other partners; or
•a VIE that does not require consolidation and is treated as an equity method investment because the Company is not the primary beneficiary or the joint venture is not a VIE and the Company does not hold the majority voting interest.
The following table presents selected financial information for our consolidated joint ventures that are VIEs as of June 27, 2025 and September 27, 2024:
| As of | |||||||||||
| (Amounts in millions) | June 27, 2025 | September 27, 2024 | |||||||||
| Cash and cash equivalents | $ | 143 | $ | 160 | |||||||
| Current assets | 320 | 322 | |||||||||
| Non-current assets | — | 2 | |||||||||
| Total assets | $ | 463 | $ | 484 | |||||||
| Current liabilities | $ | 145 | $ | 190 | |||||||
| Non-current liabilities | — | 1 | |||||||||
| Total liabilities | 145 | 191 | |||||||||
| Total Amentum equity | 246 | 228 | |||||||||
| Non-controlling interests | 72 | 65 | |||||||||
| Total equity | 318 | 293 | |||||||||
| Total liabilities and equity | $ | 463 | $ | 484 | |||||||
The following table presents selected financial information for our consolidated joint ventures that are VIEs for the three and nine months ended June 27, 2025 and June 28, 2024:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (Amounts in millions) | June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | |||||||||||||||||||
| Revenues | $ | 408 | $ | 61 | $ | 1,151 | $ | 197 | |||||||||||||||
| Cost of revenues | (385) | (53) | (1,052) | (168) | |||||||||||||||||||
| Net income including non-controlling interests | 22 | 8 | 97 | 28 | |||||||||||||||||||
The Company has an ownership share in more than 20 active joint ventures that are accounted for as equity method investments and the Company’s ownership percentages generally range from 25% to 50%. Related party receivables due from our equity method investments were $79 million and $37 million as of June 27, 2025 and September 27, 2024, respectively. These receivables are a result of items purchased and services rendered by us on behalf of our equity method investments. We have assessed these receivables as having minimal collection risk based on our historic experience with these joint ventures and our inherent influence through our ownership interest. The related party revenues earned from our equity method investments was $110 million and $199 million for the three and nine months ended June 27, 2025, respectively, and $17 million and $50 million for the three and nine months ended June 28, 2024, respectively.
Many of our joint ventures only perform on a single contract. The modification or termination of a contract under a joint venture could trigger an impairment in the fair value of our investment in these entities. In the aggregate, our maximum exposure to losses was $198 million related to our equity method investments as of June 27, 2025.
Note 11 — Accumulated Other Comprehensive Income (Loss)
17
The accumulated balances and reporting period activities for the three and nine months ended June 27, 2025 and June 28, 2024 related to accumulated other comprehensive income (loss) are summarized as follows:
| Gain (Loss) on Derivative Instruments | Foreign Currency Translation Adjustments | Pension Related Adjustments | Income Tax (Provision) Benefit Related to Items of Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||||||||||
| Balance at March 28, 2025 | $ | (7) | $ | (4) | $ | 55 | $ | (15) | $ | 29 | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassification | 1 | 15 | (1) | — | 15 | |||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | (1) | — | — | — | (1) | |||||||||||||||||||||||||||
| Balance at June 27, 2025 | $ | (7) | $ | 11 | $ | 54 | $ | (15) | $ | 43 | ||||||||||||||||||||||
| Gain (Loss) on Derivative Instruments | Foreign Currency Translation Adjustments | Pension Related Adjustments | Income Tax (Provision) Benefit Related to Items of Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||||||||||
| Balance at March 29, 2024 | $ | 11 | $ | (1) | $ | 45 | $ | (16) | $ | 39 | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassification | 9 | — | — | (1) | 8 | |||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | (6) | — | (1) | 1 | (6) | |||||||||||||||||||||||||||
| Balance at June 28, 2024 | $ | 14 | $ | (1) | $ | 44 | $ | (16) | $ | 41 | ||||||||||||||||||||||
| Gain (Loss) on Derivative Instruments | Foreign Currency Translation Adjustments | Pension Related Adjustments | Income Tax (Provision) Benefit Related to Items of Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||||||||||
| Balance at September 27, 2024 | $ | (22) | $ | 3 | $ | 55 | $ | (13) | $ | 23 | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassification | 20 | 8 | (1) | (2) | 25 | |||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | (5) | — | — | — | (5) | |||||||||||||||||||||||||||
| Balance at June 27, 2025 | $ | (7) | $ | 11 | $ | 54 | $ | (15) | $ | 43 | ||||||||||||||||||||||
| Gain (Loss) on Derivative Instruments | Foreign Currency Translation Adjustments | Pension Related Adjustments | Income Tax (Provision) Benefit Related to Items of Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||
| (Amounts in millions) | ||||||||||||||||||||||||||||||||
| Balance at September 29, 2023 | $ | 25 | $ | (5) | $ | 46 | $ | (18) | $ | 48 | ||||||||||||||||||||||
| Other comprehensive income before reclassification | — | 4 | — | — | 4 | |||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | (11) | — | (2) | 2 | (11) | |||||||||||||||||||||||||||
| Balance at June 28, 2024 | $ | 14 | $ | (1) | $ | 44 | $ | (16) | $ | 41 | ||||||||||||||||||||||
Note 12 — Segment Information
In the first quarter of fiscal year 2025, we amended our organizational structure, which resulted in the identification of two reportable segments: Digital Solutions (“DS”) and Global Engineering Solutions (“GES”).
The DS segment provides advanced digital and data-driven solutions including intelligence analytics, space system development, cybersecurity, and next generation IT across the federal government and commercial clients.
18
The GES segment provides large-scale environmental remediation, clean energy, platform engineering, sustainment and supply chain management across all seven continents for the U.S. government and allied nations.
The presentation of financial results as two reportable segments is consistent with the way the Company operates its business and the manner in which our chief operating decision maker (“CODM”), currently our Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and assessing performance. The CODM evaluates the performance of our segments based on revenues and Adjusted EBITDA. Prior year performance measures have been recast to reflect the current reportable segment structure.
The Company’s segment revenues were as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (Amounts in millions) | June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | |||||||||||||||||||
| DS | $ | 1,421 | $ | 501 | $ | 4,047 | $ | 1,431 | |||||||||||||||
| GES | 2,140 | 1,641 | 6,421 | 4,745 | |||||||||||||||||||
| Total | $ | 3,561 | $ | 2,142 | $ | 10,468 | $ | 6,176 | |||||||||||||||
Adjusted EBITDA is most comparable to net income (loss) attributable to common shareholders prepared based on GAAP. The Company defines Adjusted EBITDA as net income (loss) attributable to common shareholders adjusted for interest expense and other, net, provision for income taxes, depreciation and amortization, and certain discrete items that are not considered in the evaluation of ongoing operating performance. These discrete items include acquisition, transaction, and integration costs, non-cash gains and losses, loss on extinguishment of debt, utilization of certain fair market value adjustments assigned in purchase accounting, and share-based compensation. While we believe Adjusted EBITDA is a useful metric in evaluating operating performance by allowing better evaluation of underlying segment performance and better period-to-period comparability, it is not a metric defined by GAAP and may not be comparable to non-GAAP metrics presented by other companies.
The following table reconciles segment Adjusted EBITDA to net income (loss) attributable to common shareholders:
| Three months ended | Nine months ended | ||||||||||||||||||||||
| (Amounts in millions) | June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | |||||||||||||||||||
| Adjusted EBITDA by segment | |||||||||||||||||||||||
| DS | $ | 114 | $ | 40 | $ | 321 | $ | 118 | |||||||||||||||
| GES | 160 | 118 | 483 | 350 | |||||||||||||||||||
| Adjusted EBITDA attributable to Amentum Holdings, Inc. | 274 | 158 | 804 | 468 | |||||||||||||||||||
| Depreciation expense | (11) | (5) | (29) | (17) | |||||||||||||||||||
| Amortization of intangibles | (118) | (57) | (358) | (171) | |||||||||||||||||||
| Interest expense and other, net | (88) | (108) | (261) | (330) | |||||||||||||||||||
| Loss on extinguishment of debt | (3) | (3) | (3) | (3) | |||||||||||||||||||
| Non-controlling interests | (11) | 2 | (4) | 3 | |||||||||||||||||||
Acquisition, transaction and integration costs (1) | (32) | (9) | (62) | (20) | |||||||||||||||||||
Utilization of fair market value adjustments (2) | 8 | 1 | 9 | 4 | |||||||||||||||||||
Share-based compensation (3) | (7) | (1) | (15) | (3) | |||||||||||||||||||
| Income (loss) before income taxes | 12 | (22) | 81 | (69) | |||||||||||||||||||
| Provision for income taxes | (13) | (2) | (59) | (36) | |||||||||||||||||||
| Net income (loss) including non-controlling interests | (1) | (24) | 22 | (105) | |||||||||||||||||||
| Net income (loss) attributable to non-controlling interests | 11 | (2) | 4 | (3) | |||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 10 | $ | (26) | $ | 26 | $ | (108) | |||||||||||||||
19
(1) Represents acquisition, transaction and integration costs, including severance, retention, and other adjustments related to acquisition and integration activities.
(2) Represents the periodic utilization of the fair market value adjustments assigned to certain equity method investments and non-controlling interests based on the remaining period of performance for the related contract.
(3) Represents non-cash compensation expenses recognized for share based arrangements.
Asset information by segment is not a key measure of performance used by the CODM.
Note 13 — Earnings (Loss) Per Share
For the three and nine months ended June 28, 2024, the Company retrospectively adjusted the weighted average shares used in determining loss per share to reflect the conversion of the ownership interests of Amentum Parent Holdings LLC held by AJVLP that converted into 90,021,804 shares of the Company’s common stock at Transaction close. There were no anti-dilutive shares for the three and nine months ended June 28, 2024.
Basic and diluted earnings (loss) per share are computed as follows (in millions, except per share data):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | ||||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 10 | $ | (26) | $ | 26 | $ | (108) | |||||||||||||||
| Weighted-average number of basic shares outstanding during the period | 243 | 90 | 243 | 90 | |||||||||||||||||||
| Weighted-average number of diluted shares outstanding during the period | 243 | 90 | 243 | 90 | |||||||||||||||||||
| Basic earnings (loss) per share | $ | 0.04 | $ | (0.29) | $ | 0.11 | $ | (1.20) | |||||||||||||||
| Diluted earnings (loss) per share | $ | 0.04 | $ | (0.29) | $ | 0.11 | $ | (1.20) | |||||||||||||||
Note 14 — Legal Proceedings and Commitments and Contingencies
The Company is involved in various claims, disputes and administrative proceedings arising in the normal course of business. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that an unfavorable result and/or liability will be incurred and the cost of the unfavorable result or liability can be reasonably estimated. Management is of the opinion that any liability or loss associated with such matters, either individually or in the aggregate, will not have a material adverse effect on the Company’s operations and liquidity.
Payments to the Company on cost-plus-fee contracts are provisional and are subject to adjustments upon audit by the Defense Contract Audit Agency (“DCAA”). In management’s opinion, audit adjustments that may result from audits not yet completed or started are not expected to have a material adverse effect on the Company’s operations and liquidity.
Pending Litigation and Claims
Department of Energy Claims
In January 2020, the Company purchased assets and assumed liabilities associated with AECOM Energy & Construction, Inc. (the “Acquired Affiliate”) from AECOM (the “Seller”). At the time of the acquisition, the Acquired Affiliate had pending claims against the U.S. Department of Energy (“DOE”) related to a contract performed prior to the acquisition. The Company and the Seller agreed that all future claim recoveries and costs with the DOE would be split 10% to the Company and 90% to the Seller. Following the DOE’s denial of the claims, on December 20, 2020, the Acquired Affiliate filed an appeal of these decisions in the U.S. Court of Federal Claims. The Company has estimated and recorded $138 million within other long-term assets on the balance sheet and $125 million within other long-term liabilities on the balance sheet representing the Company’s payable to the Seller related to this matter. No changes to these amounts have been recorded since the acquisition. The Company intends to cooperate with the Seller in the pursuit of all claimed amounts but can provide no certainty that the Company will recover the claims. The Company does not believe any additional incurred claims or costs related to this matter will have a material adverse effect on the Company’s results of operations.
U.S. Government Investigations
We primarily sell our services to the U.S. Government. These contracts are subject to extensive legal and regulatory requirements, and we are occasionally the subject of investigations by various agencies of the U.S. Government who investigate whether our operations are being conducted in accordance with these requirements. Such investigations could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed on us, or could lead to suspension or debarment from future U.S. Government contracting. U.S. Government investigations often take years to
20
complete and may result in adverse action against us. Any adverse actions arising from such matters could have a material effect on our ability to invoice and receive timely payment on our contracts, perform contracts or compete for contracts with the U.S. Government and could have a material effect on our operating performance. There are currently no investigations that are expected to have a material impact on our results of operations.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our unaudited condensed consolidated financial condition and results of operations should be read in conjunction with the Amentum Holdings, Inc. unaudited condensed consolidated financial statements, and the notes thereto, and other data contained elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis should also be read in conjunction with our audited consolidated financial statements, and notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended September 27, 2024. In addition, please see “Information Relating to Forward-Looking Statements” and “Item 1A. Risk Factors” within our Annual Report on Form 10-K for a discussion of the risks, uncertainties and assumptions associated with these statements.
References to “Amentum”, the “Company”, “we”, “our” or “us” refer to Amentum Holdings, Inc. and its subsidiaries unless otherwise stated or indicated by context.
Overview
We are a global advanced engineering and technology solutions provider to a broad base of U.S. and allied government agencies, supporting programs of critical national importance across energy and environmental, intelligence, space, defense, civilian and commercial end-markets. We offer a broad reach of capabilities including environment and climate sustainability, intelligence and counter threat solutions, data fusion and analytics, engineering and integration, advanced test, training and readiness, and citizen solutions. As a leading provider of differentiated technology solutions, we have built a repertoire of deep customer knowledge, enabling us to engage our customers across multiple capabilities and markets. Underpinned by a strong culture of ethics, safety and inclusivity, Amentum is committed to operational excellence and successful execution.
In fiscal year 2024, we completed our merger with Jacobs Solutions Inc. (“Jacobs”) Critical Mission Solutions business and portions of the Jacobs Divergent Solutions business (and, together with the Critical Mission Solutions business, referred to as the “CMS Business” or “CMS”), a leading provider of mission-critical, technology-driven services in government and commercial markets.
We conduct our business activities and report financial results as two business segments: Digital Solutions (“DS”) and Global Engineering Solutions (“GES”). The DS segment provides advanced digital and data-driven solutions including intelligence analytics, space system development, cybersecurity, and next generation IT across the federal government and commercial clients. The GES segment provides large-scale environmental remediation, clean energy, platform engineering, sustainment and supply chain management across all 7 continents for the U.S. government and allied nations.
Budgetary and Regulatory Environment
In fiscal year 2024, we generated approximately 90% of our revenues from contracts with the U.S. federal government, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. federal government. We carefully follow the U.S. federal budget, legislative and contracting trends and activities and evolve our strategies accordingly.
The U.S. federal government fiscal year (“GFY”) 2025 appropriations bill was passed in March 2025. The bill provided a 1% increase for defense discretionary spending to $892 billion and a 1% increase in non-defense discretionary spending to $708 billion. The President’s GFY 2026 budget request was submitted to Congress on May 2, 2025, and if enacted, would maintain defense discretionary spending at $892 billion and reduce non-defense discretionary spending by approximately 21% to $557 billion. Additionally, the budget request assumes an increase in defense spending based on the defense reconciliation legislation, which would result in total GFY 2026 defense spending of $1.01 trillion, an increase of 13% from the GFY 2025 enacted level.
On July 4, 2025, the One Big, Beautiful Bill Act was passed which made certain tax cuts permanent, reduced healthcare spending and increased spending related to border security, defense and energy production. The bill included $150 billion in additional defense spending and $133 billion in supplemental spending for border security to be spent over the next two years and also added $10 billion in new spending for NASA’s human spaceflight programs and infrastructure modernization.
Under the Trump administration, the Department of Government Efficiency (“DOGE”) was created to propose savings through improvements to technology and increases to productivity in the federal workforce; we continue to monitor the actions of the new administration which could result in a change to budgetary priorities or impact federal government procurement timing.
21
Although a limited number of our contracts for the U.S. Government have been affected by DOGE and other changes in budgetary priorities by the new administration, the impact has not been material to date.
Decreases in, or delays in approving, the federal government’s budget, decreases in government spending on the types of programs that we support, delays in government contract awards, and pauses on government contracts on which we are currently performing could have an adverse impact on our business. For further information, please see Part I. Item 1A. Risk Factors in our Fiscal Year 2024 Form 10-K.
While we view the budget environment as constructive and believe core funding sources for our primary customer-based markets will continue to experience bipartisan tailwinds, there can be no certainty about the level of funding for any particular GFY or that appropriations bills will be passed in a timely manner. During those periods of time when appropriations bills have not been passed and signed into law, government agencies operate under a continuing resolution (“CR”), a temporary measure allowing the government to continue operations at prior year funding levels. Depending on their scope, duration, and other factors, CRs can negatively impact our business due to delays in new program starts, delays in contract awards decisions, and other factors.
Additionally, the U.S. Government is in the process of, or has announced its intent to, increase current tariffs, impose additional tariffs, and expand tariffs on goods imported from various countries into the United States. The tariffs that have been enacted by the U.S. or other countries did not materially impact our business or financial results for the three months ended June 27, 2025. We are currently evaluating the potential future impacts of the announced tariffs on our business and financial condition.
For a discussion of risks related to tariffs and other trade policy issues, see Part II. Item 1A. Risk Factors in this Report and Part I. Item 1A. Risk Factors in our Fiscal Year 2024 Form 10-K.
Market Environment
We believe our scale, breadth of capabilities, and depth of experience give us a robust understanding of our customers’ evolving needs. Given our portfolio diversity, we believe our total addressable market, and associated growth rate, is sufficient to support our strategic growth plans.
We believe Amentum’s capabilities are strategically aligned to well-funded, long-term priorities for the federal government, allied nations, and commercial customers. Specifically, we believe we are well positioned to continue to win new business driven by the following trends in our addressable market:
•Increasing demand for outsourced services and solutions with federal government customers;
•Increased global demand for clean and environmentally sustainable solutions;
•Increased spending on government-wide modernization priorities;
•Increasing government focus on near-peer competitors and other nation state threats;
•Increasing discretionary spending for Indo-Pacific regional activities and initiatives; and
•Increased investment in advanced technologies (e.g., hypersonics, microelectronics, unmanned, electromagnetic spectrum).
22
Results of Operations for the Three Months Ended June 27, 2025 and June 28, 2024
The following table presents our results of operations for the periods presented:
| Three Months Ended | |||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | Change | |||||||||||||||||||||
| (Dollars in millions) | Dollars | Dollars | Dollars | Percent | |||||||||||||||||||
| Revenues | $ | 3,561 | $ | 2,142 | $ | 1,419 | 66.2 | % | |||||||||||||||
| Cost of revenues | (3,193) | (1,936) | (1,257) | 64.9 | |||||||||||||||||||
| Selling, general, and administrative expenses | (165) | (77) | (88) | 114.3 | |||||||||||||||||||
| Amortization of intangibles | (118) | (57) | (61) | 107.0 | |||||||||||||||||||
| Equity earnings of non-consolidated subsidiaries | 18 | 17 | 1 | 5.9 | |||||||||||||||||||
| Operating income | 103 | 89 | 14 | 15.7 | |||||||||||||||||||
| Interest expense and other, net | (88) | (108) | 20 | (18.5) | |||||||||||||||||||
| Loss on extinguishment of debt | (3) | (3) | — | — | |||||||||||||||||||
| Income (loss) before income taxes | 12 | (22) | 34 | (154.5) | |||||||||||||||||||
| Provision for income taxes | (13) | (2) | (11) | 550.0 | |||||||||||||||||||
| Net income (loss) including non-controlling interests | (1) | (24) | 23 | (95.8) | |||||||||||||||||||
| Less: net income attributable to non-controlling interests | 11 | (2) | 13 | (650.0) | |||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 10 | $ | (26) | $ | 36 | (138.5) | ||||||||||||||||
Revenues — The increase in revenues was primarily attributable to revenues from the merger with CMS.
Cost of revenues — The increase in cost of revenues was primarily attributable to the increased revenues volume from the merger with CMS. As a percentage of revenues, cost of revenues was 89.7% for the three months ended June 27, 2025 compared to 90.4% for the three months ended June 28, 2024.
Selling, general, and administrative expenses (“SG&A”) — The increase in SG&A was primarily attributable to the merger with CMS. SG&A as a percentage of revenues increased to 4.6% for the three months ended June 27, 2025 from 3.6% for the three months ended June 28, 2024 primarily due to the merger with CMS and an increase in acquisition, transaction and integration costs.
Amortization of intangibles — Amortization of intangibles primarily relates to the amortization of our backlog and customer relationship intangible assets, which increased due to the merger with CMS.
Equity earnings of non-consolidated subsidiaries — Equity earnings of non-consolidated subsidiaries include our proportionate share of the income from equity method investments and was consistent with the three months ended June 28, 2024.
Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our term loan principal balance as compared to the three months ended June 28, 2024 combined with a decrease in interest rates, partially offset by the interest incurred on our Senior Notes during the three months ended June 27, 2025.
Loss on extinguishment of debt — The loss on extinguishment of debt for the three months ended June 27, 2025 and June 28, 2024 was due to a $191 million voluntary principal payment on the Term Loan and a $150 million voluntary principal payment on the previous Second Lien Tranche 1 Term Facility, respectively.
Provision for income taxes — The effective tax rate for the three months ended June 27, 2025 was 108.3%, as compared to (9.1)% for the three months ended June 28, 2024. The change in the effective tax rate was primarily due to the recognition of a valuation allowance against a disallowed interest expense deferred tax asset relative to income (loss) before income taxes in the respective period.
Net income (loss) attributable to non-controlling interests — Net income (loss) attributable to non-controlling interests includes the utilization of fair market value adjustments assigned to certain non-controlling interests based on the remaining period of performance for the related contract partially offset by the minority interests in our consolidated joint ventures that are not wholly-owned.
23
Results of Operations for the Nine Months Ended June 27, 2025 and June 28, 2024
The following table presents our results of operations for the periods presented:
| Nine Months Ended | |||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | Change | |||||||||||||||||||||
| (Dollars in millions) | Dollars | Dollars | Dollars | Percent | |||||||||||||||||||
| Revenues | $ | 10,468 | $ | 6,176 | $ | 4,292 | 69.5 | % | |||||||||||||||
| Cost of revenues | (9,372) | (5,576) | (3,796) | 68.1 | |||||||||||||||||||
| Selling, general, and administrative expenses | (440) | (216) | (224) | 103.7 | |||||||||||||||||||
| Amortization of intangibles | (358) | (171) | (187) | 109.4 | |||||||||||||||||||
| Equity earnings of non-consolidated subsidiaries | 47 | 51 | (4) | (7.8) | |||||||||||||||||||
| Operating income | 345 | 264 | 81 | 30.7 | |||||||||||||||||||
| Interest expense and other, net | (261) | (330) | 69 | (20.9) | |||||||||||||||||||
| Loss on extinguishment of debt | (3) | (3) | — | — | |||||||||||||||||||
| Income (loss) before income taxes | 81 | (69) | 150 | (217.4) | |||||||||||||||||||
| Provision for income taxes | (59) | (36) | (23) | 63.9 | |||||||||||||||||||
| Net income (loss) including non-controlling interests | 22 | (105) | 127 | (121.0) | |||||||||||||||||||
| Less: net loss attributable to non-controlling interests | 4 | (3) | 7 | (233.3) | |||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 26 | $ | (108) | $ | 134 | (124.1) | ||||||||||||||||
Revenues — The increase in revenues was primarily attributable to revenues from the merger with CMS.
Cost of revenues — The increase in cost of revenues was primarily attributable to the increased revenues volume from the merger with CMS. As a percentage of revenues, cost of revenues was 89.5% for the nine months ended June 27, 2025 compared to 90.3% for the nine months ended June 28, 2024.
Selling, general, and administrative expenses (“SG&A”) — The increase in SG&A was primarily attributable to the merger with CMS. SG&A as a percentage of revenues increased to 4.2% for the nine months ended June 27, 2025 from 3.5% for the nine months ended June 28, 2024 primarily due to the merger with CMS and an increase in acquisition, transaction and integration costs.
Amortization of intangibles — Amortization of intangibles primarily relates to the amortization of our backlog and customer relationship intangible assets, which increased due to the merger with CMS.
Equity earnings of non-consolidated subsidiaries — Equity earnings of non-consolidated subsidiaries include our proportionate share of the income from equity method investments partially offset by the utilization of fair market value adjustments assigned to certain equity method investments based on the remaining period of performance for the related contract and was consistent with the nine months ended June 28, 2024.
Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our term loan principal balance as compared to the nine months ended June 28, 2024 combined with a decrease in interest rates, partially offset by the interest incurred on our Senior Notes during the nine months ended June 27, 2025.
Loss on extinguishment of debt — The loss on extinguishment of debt for the nine months ended June 27, 2025 and June 28, 2024 was due to a $191 million voluntary principal payment on the Term Loan and a $150 million voluntary principal payment on the previous Second Lien Tranche 1 Term Facility, respectively.
Provision for income taxes — The effective tax rate for the nine months ended June 27, 2025 was 72.8%, as compared to (52.2)% for the nine months ended June 28, 2024. The change in the effective tax rate was primarily due to the recognition of a valuation allowance against a disallowed interest expense deferred tax asset relative to income (loss) before income taxes in the respective period.
Net income (loss) attributable to non-controlling interests — Net income (loss) attributable to non-controlling interests includes the utilization of fair market value adjustments assigned to certain non-controlling interests based on the remaining period of performance for the related contract partially offset by the minority interests in our consolidated joint ventures that are not wholly-owned.
24
Segment Results for the Three and Nine Months Ended June 27, 2025 and June 28, 2024
The primary financial performance measures we use to manage our reportable segments and monitor results of operations are revenues and Adjusted EBITDA. The following tables present our performance measures by reportable segment:
Digital Solutions
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | Change | June 27, 2025 | June 28, 2024 | Change | ||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Dollars | Dollars | Dollars | Percent | Dollars | Dollars | Dollars | Percent | |||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 1,421 | $ | 501 | $ | 920 | 184 | % | $ | 4,047 | $ | 1,431 | $ | 2,616 | 183 | % | |||||||||||||||||||||||||||||||
| Adjusted EBITDA | 114 | 40 | 74 | 185 | % | 321 | 118 | 203 | 172 | % | |||||||||||||||||||||||||||||||||||||
The increase in revenues for the three and nine months ended June 27, 2025, as compared to the three and nine months ended June 28, 2024, was primarily attributable to revenues from the merger with CMS, higher volume from new contract awards and growth on existing programs, partially offset by the expected ramp-down of historical programs.
The increase in Adjusted EBITDA for the three and nine months ended June 27, 2025, as compared to the three and nine months ended June 28, 2024, was primarily attributable to the revenue growth factors described above.
Global Engineering Solutions
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | Change | June 27, 2025 | June 28, 2024 | Change | ||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Dollars | Dollars | Dollars | Percent | Dollars | Dollars | Dollars | Percent | |||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 2,140 | $ | 1,641 | $ | 499 | 30 | % | $ | 6,421 | $ | 4,745 | $ | 1,676 | 35 | % | |||||||||||||||||||||||||||||||
| Adjusted EBITDA | 160 | 118 | 42 | 36 | % | 483 | 350 | 133 | 38 | % | |||||||||||||||||||||||||||||||||||||
The increase in revenues for the three and nine months ended June 27, 2025, as compared to the three and nine months ended June 28, 2024, was primarily attributable to revenues from the merger with CMS, the ramp up of new contract awards and growth on existing programs, partially offset by the expected ramp-down of historical programs.
The increase in Adjusted EBITDA for the three and nine months ended June 27, 2025, as compared to the three and nine months ended June 28, 2024, was primarily attributable to the revenue growth factors described above and improved operational performance.
Revenues by Contract Type
Our earnings and profitability may vary materially depending on changes in the proportionate amount of revenues derived from each type of contract. For a discussion of the types of contracts under which we generate revenues, see “Critical Accounting Policies” below. The following table summarizes revenues by contract type, as a percentage of revenues, for the periods presented:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 27, 2025 | June 28, 2024 | June 27, 2025 | June 28, 2024 | ||||||||||||||||||||
| Cost-plus-fee | 65 | % | 60 | % | 64 | % | 62 | % | |||||||||||||||
| Fixed-price | 23 | % | 28 | % | 24 | % | 27 | % | |||||||||||||||
| Time-and-materials | 12 | % | 12 | % | 12 | % | 11 | % | |||||||||||||||
| Total revenues | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
25
Backlog
The Company's backlog represents the estimated amount of future revenues to be recognized under negotiated contracts. The Company’s backlog includes unexercised option years and excludes the value of task orders that may be awarded under multiple award indefinite delivery / indefinite quantity (“IDIQ”) vehicles until such task orders are issued.
The Company’s backlog is either funded or unfunded:
•Funded backlog represents contract value for which funding is appropriated less revenues previously recognized on the contract.
•Unfunded backlog represents estimated values that have the potential to be recognized as revenues from negotiated contracts for which funding has not been appropriated and from unexercised contract options.
As of June 27, 2025, the Company had total backlog of $44.6 billion, compared with $26.9 billion as of June 28, 2024, an increase of $17.7 billion primarily due to the merger with CMS. Funded backlog as of June 27, 2025 was $5.6 billion.
There is no assurance that all backlog will result in future revenues being recognized, and the backlog balance is subject to increases or decreases based on the execution of new contracts, contract modifications or extensions, deobligations, early terminations, and other factors.
Effects of Inflation
Given the nature of our operations and contract type mix, we expect the impact of inflation on our business may be limited for some of our contracts. During the nine months ended June 27, 2025, 64% of our revenues was generated under cost-plus-fee type contracts that have limited inflation risk as they include provisions that adjust revenues to cover costs affected by inflation. The remainder of our revenues was generated under time-and-materials or fixed-price type contracts which we have historically been able to price in a manner that accommodates inflation and cost increases over the period of performance but changes in our expectations with respect to inflation rates or in the overall mix of our contract types could cause future results to differ substantially.
Liquidity and Capital Resources
Existing cash and cash equivalents and cash generated by operations are our primary sources of liquidity, as well as sales of receivables under our Master Accounts Receivable Purchase Agreement (“MARPA”) and available borrowing capacity under the revolving credit facility provided for in the senior secured credit facility (the “Credit Facility”).
The Credit Facility consists of a seven year, $3,750 million term facility (“Term Loan”) and a five year, $850 million revolving facility (“Revolver”), including a $200 million letter of credit subfacility and a $100 million swingline subfacility. The Revolver and the Term Loan mature on September 27, 2029 and September 27, 2031, respectively. The Term Loan requires quarterly principal amortization payments of $9 million, which commenced on March 31, 2025, with the remainder of the principal thereunder being due at maturity. In August 2024, the Company also completed an offering of $1,000 million in aggregate principal amount of 7.250% senior notes due August 1, 2032 (the “Senior Notes”).
The Credit Facility and the Senior Notes are guaranteed by substantially all of our wholly owned material domestic restricted subsidiaries, subject to customary exceptions set forth in the credit agreement and indenture, respectively.
The interest rates applicable to the Term Loan are floating interest rates equal to an Alternate Base Rate or Adjusted Term Secured Overnight Financing Rate plus an applicable margin based upon our net leverage ratio.
Each of the credit agreement and indenture requires us to comply with certain representations and warranties, customary affirmative and negative covenants and, in the case of the Revolver, under certain circumstances, a financial covenant. We were in compliance with all covenants as of June 27, 2025.
We believe that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund on-going operations, capital expenditures, scheduled principal and interest payments on our debt obligations, scheduled lease payments, and other working capital requirements over at least the next twelve months.
On June 26, 2025, we completed the sale of a hardware and product business, Rapid Solutions, to Lockheed Martin Corporation for a purchase price of $360 million in cash.
As part of our debt reduction initiatives, we made voluntary principal payments on the Term Loan of approximately $191 million and $250 million on June 27, 2025 and July 31, 2025, respectively. Over the longer term, our ability to generate sufficient cash flows from operations necessary to fulfill the obligations under the Credit Facility, Senior Notes and any other
26
indebtedness we may incur will depend on our future financial performance which could be affected by factors outside of our control, including, but not limited to, worldwide economic and financial market conditions.
See “Note 6 — Sales of Receivables” and “Note 9 — Debt” of the notes to the condensed consolidated financial statements contained within this Quarterly Report on Form 10-Q.
Cash Flow Information
| Nine Months Ended | |||||||||||
| (Amounts in millions) | June 27, 2025 | June 28, 2024 | |||||||||
| Net cash provided by operating activities | $ | 273 | $ | 160 | |||||||
| Net cash provided by (used in) investing activities | 236 | (8) | |||||||||
| Net cash used in financing activities | (231) | (189) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 8 | 3 | |||||||||
| Net change in cash and cash equivalents | $ | 286 | $ | (34) | |||||||
Net cash provided by operating activities increased by $113 million for the nine months ended June 27, 2025 when compared to the nine months ended June 28, 2024 as a result of a $289 million increase in cash earnings due to contributions from the merger with CMS and offset by $176 million in changes in operating assets and liabilities.
Net cash provided by investing activities increased by $244 million for the nine months ended June 27, 2025 when compared to the nine months ended June 28, 2024 primarily due to the sale of the Rapid Solutions business partially offset by the cash payment made as part of the Transaction based on the final net working capital position.
Net cash used in financing activities increased by $42 million for the nine months ended June 27, 2025 when compared to the nine months ended June 28, 2024 primarily due to increased principal payments on our Term Loan and distributions to non-controlling interests.
Divestiture
On June 26, 2025, we completed the sale of a hardware and product business, Rapid Solutions, to Lockheed Martin Corporation for a purchase price of $360 million in cash. The sale of Rapid Solutions, which was part of the DS segment, was not classified as discontinued operations as it did not represent a strategic shift in our business.
Critical Accounting Policies and Estimates
There have been no significant changes to the Company’s critical accounting policies as disclosed in our Annual Report on Form 10-K for the year ended September 27, 2024.
Recent Accounting Pronouncements
See “Note 2 — Recent Accounting Pronouncements” of the notes to the condensed consolidated financial statements contained within this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The remaining balance under the Term Loan, and any additional amounts that may be borrowed under the Revolver, are currently subject to interest rate fluctuations. We have the ability to manage these fluctuations in part through interest rate swaps on our variable rate debt. We have entered into floating-to-fixed interest rate swap agreements for an aggregate notional amount of $1.8 billion related to a portion of our variable rate debt. With every one percent fluctuation in the applicable interest rates, interest expense on our variable rate debt for the nine months ended June 27, 2025 would have fluctuated by approximately $28 million.
27
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 27, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
28
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The information required with respect to this item is set forth in Note 14 — Legal Proceedings and Commitments and Contingencies in the Notes to Consolidated Financial Statements appearing under Part I, Item 1 of this Form 10-Q.
Item 1A. Risk Factors
Other than as described below, there have been no material changes to our Risk Factors disclosed in the Company’s Form 10-K for the year end September 27, 2024.
Uncertainty over global tariffs, or the financial impact of tariffs, may negatively impact our results.
Our business could be adversely impacted by changes in the U.S. Government’s approach to tariffs and other trade policies. As a result of major U.S. Government trade policy changes announced by President Trump, there is currently significant uncertainty with respect to tariffs that may impact our supply chain. New or increased tariffs for imports into the United States, as well as new or increased tariffs or trade bans imposed by other countries, could have an adverse effect on both our U.S. and international operations due to increased costs of materials, disruptions or delays in deliveries, and greater difficulty in planning and operating our business. While our business in the U.S. primarily provides labor services to our customers, some of our U.S. work involves providing goods that may be subject to tariffs. Our non-U.S. work could also be impacted by greater costs for goods sourced from the U.S. due to increased tariffs imposed by other countries. To date, the Company has not experienced a material negative impact from the recent changes in tariff policies. Although we plan to continue to monitor trade policy developments closely and to mitigate the adverse impacts of any changes where possible, we may not be able to fully mitigate such impacts in all situations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
29
| Filed with this Form 10-Q | Incorporated by Reference | |||||||||||||||||||||||||||||||
| Exhibit No. | Description | Form | Filing Date | Exhibit No. | ||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||
| 101.INS | XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) | |||||||||||||||||||||||||||||||
| * | Denotes a management contract, compensatory plan, or arrangement | |||||||||||||||||||||||||||||||
30
SIGNATURES
| Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. | |||||||||||
| AMENTUM HOLDINGS, INC. | |||||||||||
| Registrant | |||||||||||
| Date: | August 6, 2025 | By: | /s/ Travis B. Johnson | ||||||||
| Travis B. Johnson | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer and Principal Accounting Officer) | |||||||||||
31