Amentum Holdings, Inc. (NYSE:AMTM) Q1 2026 Earnings Call Transcript

Amentum Holdings, Inc. (NYSE:AMTM) Q1 2026 Earnings Call Transcript February 10, 2026

Operator: Good morning, ladies and gentlemen, and welcome to the Amentum Q1 Fiscal Year 2026 Results Conference Call. [Operator Instructions] This call is being recorded on Tuesday, February 10, 2026. I would now like to turn the conference over to Nathan Rutledge.

Nathan Rutledge: Thank you, and good morning, everyone. We hope you’ve had an opportunity to read our earnings release, which we issued yesterday afternoon and is posted on our Investor Relations website. We have also provided presentation slides to facilitate today’s call. So let’s move to Slide 2. Please note that this morning’s discussion will contain forward-looking statements that are subject to important factors that could cause actual results to differ materially from anticipated. I refer you to our SEC filings for a discussion of these factors, including the Risk Factors section of our annual report on Form 10-K. The statements represent our views as of today, and subsequent events may cause our views to change. We may elect to update the forward-looking statements at some point in the future, but specifically disclaim any obligation to do so.

In addition, we will discuss non-GAAP financial measures, which we believe provide useful information for investors. Both our earnings release and supplemental presentation slides include reconciliations to the most comparable GAAP measures. We do not provide reconciliations of forward-looking non-GAAP financial measures due to the inherent difficulty in forecasting and quantifying certain significant items. These non-GAAP financial measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Our safe harbor statement included on this slide should be incorporated as part of any transcript of this call. With me today to discuss our business and financial results are John Heller, Chief Executive Officer; and Travis Johnson, Chief Financial Officer.

We are also joined by other members of management, including Steve Arnette, Chief Operating Officer. With that, moving to Slide 3, it’s my pleasure to turn the call over to our CEO, John Heller John Heller.

John Heller: Thank you, Nathan, and thank you, everyone, for joining us today. We entered the new fiscal year continuing our strong momentum, including another robust quarter of bookings that reinforce our alignment to the high-demand mission areas of nuclear energy, space and critical digital infrastructure. As a result, this morning, I’m pleased to share another quarter of results that put Amentum on track toward achieving both our near-term fiscal year 2026 outlook and our longer-term strategic growth objectives. Our differentiated business continues to perform. And as a management team, we’re setting clear priorities and expectations, and we’re executing. Bottom line, momentum continues to deliver. So let’s jump right in with our quarterly results.

While the longest government shutdown in history impacted performance in the quarter, I am especially proud of our teams around the world who remain focused, delivering exceptional outcomes for our customers and results largely in line with our expectations. Key highlights, which Travis will cover in more detail shortly, include revenue of $3.2 billion, reflecting normalized growth of 3%, adjusted EBITDA of $263 million with robust margins of 8.1% and adjusted diluted earnings per share of $0.54, up 6% year-over-year. This performance is a direct result of our agile business model, disciplined execution, consistent focus on our strategic priorities and continued demand across our end markets. Let’s turn to Slide 4, where I’ll highlight how Amentum’s focus on growth translated into a series of strategically significant wins this quarter.

We delivered $3.3 billion in net bookings, resulting in a first quarter and last 12 months book-to-bill of 1x and 1.1x, respectively. Including strategic joint venture awards, our imputed book-to-bill was 1.3x for the last 12 months. This consistent performance enabled our industry-leading backlog to grow 4%, reaching over $47 billion. And at quarter end, we had $23 billion in proposals awaiting award, the majority of which are new business to Amentum, including nearly $2 billion already won and under protest or awaiting corrective action. As I’ll discuss in more detail, we continue to make meaningful progress advancing large multiyear opportunities directly aligned with our higher-margin accelerating growth markets, a point evidenced by our consistent book-to-bill performance at or above 1x.

Our business development engine prioritizes scale, duration and strategic relevance, grounded in deep customer relationships, shaping solutions and building long-cycle programs where customers value trusted partners. We are particularly encouraged by our progress in nuclear energy, an accelerating growth market for Amentum, which is showing robust demand signals, both overseas and in the United States. Years of technical investment and program execution have led to tangible awards, including nearly $1 billion in the first quarter alone. reinforcing our role as a trusted partner across both existing facilities and new build programs. Leveraging our technical leadership in nuclear energy, Amentum was selected by Rolls-Royce as the global program delivery partner for its small modular reactors, including initial deployments in the U.K. and Czech Republic.

Under this partnership, we will apply decades of experience in nuclear engineering and design, systems integration and program governance. Amentum was also awarded a 10-year $730 million contract by EDF Nuclear Power to support new and existing power stations in the U.K., reinforcing our role as a trusted partner to one of the world’s largest nuclear utilities. And in the Netherlands, Amentum secured a 5-year $207 million contract to provide planning and engineering services supporting the future development of up to 2 gigawatt scale power plants, strengthening our position in Europe’s energy transition. Beyond nuclear, we continue to win work that reflects the breadth and diversification of our portfolio across customers, geographies and contract types.

Our capabilities in digital engineering, advanced sustainment and other mission-critical operations are resonating with customers, both domestically and internationally. Award highlights include the U.S. Air Force 6-year single award IDIQ with a ceiling value of up to $995 million for unmanned sustainment, modernization and training. Under this contract, Amentum will deploy specialized solutions and expertise in the U.S. and globally to reinforce readiness and training capabilities. Next, we were awarded DISA Compute-as-a-Service contract, a 5-year $120 million award to deliver scalable computing power on demand. We’re excited to support our customers’ mission through this unique outcome-based contract and see it as a potential model for shaping future proposals.

Finally, we secured a 3-year $270 million contract from a foreign military customer to provide advanced C5ISR solutions. Our progress this quarter demonstrates consistent execution against our strategy and reinforces our confidence in our ability to continue building a high-quality backlog and delivering durable long-term growth. Before we dive into our Space Systems and Technologies market, let’s turn to Slide 5 to step back and reanchor our discussion in the growth framework we introduced last quarter. We outlined 3 accelerating growth markets where Amentum is particularly well positioned, Space Systems and Technologies, critical digital infrastructure and global nuclear energy. These markets are characterized by strong demand visibility, attractive margin profiles and long-term growth potential across government and commercial customers.

These markets also align with enduring macro trends and support the technological needs of a growing global economy. Please turn to Slide 6 to cover in more detail Space Systems and Technologies, which we view as a set of interconnected markets that scale together across satellites, launch, integrated systems and satellite communications. Together, they represent an approximately $90 billion market projected to grow around 9% annually over the next 5 years, driven by higher launch cadence and increasing mission demand. Starting with satellites, demand continues to shift towards proliferated low earth orbit constellations. Smaller satellites now dominate launch volumes across broadband, sensing and national security missions. These architectures enhance resilience, but also increase integration and life cycle complexity, areas where customers value experienced system integrators.

Integrated systems are also changing rapidly. Infrastructure is becoming more software-defined, virtualized and cloud integrated. While this improves scalability, it also raises the importance of integration, cybersecurity, automation and end-to-end mission operations as data volumes and mission tempo increase. Launch activity is accelerating. Lower-cost commercial launch, reusable vehicles and increased competition are driving a higher cadence across government and commercial customers. As launch volumes expand, operational demands increase across mission integration, safety and sustainment. Satellite communications or SATCOM, is also expanding as a foundational layer of global connectivity. Growth in broadband constellations, mobile communications and sovereign networks is driving higher throughput and adoption of multi-orbit architectures.

SATCOM underpins mission-critical defense, mobility and commercial applications worldwide. Taken together, these trends are expanding the space market and increasing demand for companies like Amentum that can integrate, operate and sustain complex systems across their full life cycle. Moving to Slide 7. Let’s discuss how Amentum is uniquely positioned with robust experience and capabilities to advance the future of space. Beginning with missile defense and command and control integration and modernization, demand continues to rise for resilience-based domain awareness and integrated missile warning and tracking. These priorities are central to U.S. and allied national security strategies and are driving sustained investment. Amentum supports these national security missions today through programs such as IRES, providing advanced engineering sustainment and NIS2 supporting global surveillance, missile warning and classified communications.

As hypersonic and ballistic threats evolve, demand for satellite-based tracking will only increase. Our performance and expanding capabilities positions Amentum well for space-enabled missile defense opportunities such as Golden Dome under the $151 billion SHIELD IDIQ on which Amentum was recently awarded a position. Amentum plays a critical role providing full life cycle solutions for human exploration and has numerous active programs supporting Orion, the space launch system and exploration ground systems. These programs require continuous engineering, integration, operations and sustainment across multiyear mission cycles. They are not onetime development efforts, but long-duration recurring opportunities supported by sustained demand across multiple human space flight missions.

These efforts require advanced propulsion, power, autonomy and payload integration, areas where Amentum brings deep expertise and where we see growth across both national security and commercial customers. Finally, in deep space research and development, Amentum focuses on robotic exploration and early-stage systems that extend human reach beyond Earth’s orbit. Our work includes missions such as space vehicles designed to operate in extreme lunar environments. We also see growing opportunities to support emerging technologies, including propulsion systems that will leverage advances in nuclear energy and in Mars-related ascent and sample return technologies, where early research and systems engineering are critical to reducing risk. We’re positioned to lead mission-critical space integration today while scaling and extending our capabilities to capture long-term growth across the space economy of tomorrow.

In summary, Amentum enters the remainder of the fiscal year from a position of strength. Our results, backlog and pipeline reflect disciplined execution, durable customer demand and the value of our differentiated capabilities across complex mission-critical environments. As global needs evolve across defense, energy, space and digital infrastructure, we are well positioned to support our customers’ most important missions while creating long-term value for our stakeholders. We remain focused on execution, growth and delivering on the commitments we’ve made. With that, I’ll turn it over to Travis.

Travis Johnson: Thank you, John, and good morning, everyone. I’m excited to discuss with you today Amentum’s solid first quarter performance, our continued trajectory to achieve net leverage less than 3x by year-end, enabling a more flexible and opportunistic capital deployment posture and our confidence in achieving full year results in line with the guidance provided in November. To echo John’s sentiment, I’m particularly encouraged by the continued successful execution of our strategy, evidenced by another quarter of robust bookings and by outstanding margin performance, both of which were enabled by the relentless focus and dedication to operational excellence from our employees around the globe. With that, let’s begin with an overview of our financial performance on Slide 8.

Revenue in the first quarter totaled $3.24 billion, reflecting the joint venture transitions and divestitures previously discussed as well as impacts from the government shutdown. Underlying growth normalizing for these items was approximately 3%, driven by the ramp-up of new contract awards in our critical digital infrastructure and Space Systems and Technologies accelerating growth markets. Adjusted EBITDA of $263 million benefited from a 40 basis point year-over-year increase in adjusted EBITDA margins to 8.1%. Alongside continued strategic progress to prioritize higher-margin work, margin expansion was enabled by strong program performance and reduced indirect spending as a result of realized cost synergies and disciplined expense management during the shutdown.

Adjusted diluted earnings per share of $0.54 was up 6% from a year ago and reflects lower interest expense driven by our debt reduction initiative. Moving to our reportable segment results on Slide 9. Digital Solutions delivered revenue of $1.34 billion, representing 4% growth on a reported basis and a robust 8% after normalizing for the items mentioned previously. The year-over-year increase was driven by the continued ramp-up of new contract awards, led by strength from commercial programs and critical digital infrastructure. Adjusted EBITDA increased to $103 million as a result of the higher revenue volume, resulting in adjusted EBITDA margins of 7.7%. Turning to Global Engineering Solutions. Revenue was $1.9 billion, reflecting the impacts from JV transitions, the divestiture and the government shutdown.

Normalizing for these items, underlying revenue was consistent with the prior year as revenue from new contract awards were offset by the expected ramp down of certain historical programs. Adjusted EBITDA of $160 million reflects an 80 basis point year-over-year increase in adjusted EBITDA margins to 8.4%. The strong profitability was enabled by prioritizing higher-margin growth opportunities, disciplined program execution and delivering against cost synergy initiatives. Now turning to Slide 10 to cover our cash flow and capital structure highlights. First quarter free cash flow included an additional pay cycle compared to the prior year quarter and was impacted by temporary collections timing from the government shutdown and holiday closures, resulting in a use of $142 million.

It is important to emphasize that this is only timing related. In fact, collections in the first 5 days of the second quarter more than doubled compared to the same period in the prior year. As a result, we anticipate strong free cash flow in the second quarter and remain confident in meeting our full year free cash flow guidance. From a liquidity perspective, our position remains healthy with Q1 ending cash on hand of $247 million, a fully undrawn $850 million revolver and no near-term maturities. We’re also pleased with the recent Moody’s credit rating upgrade, which underscores our improving financial profile, immediately reduces interest expense on our Term Loan B by 25 basis points and positions us for enhanced financial flexibility and market access moving forward.

With a strong balance sheet, robust liquidity and focus on generating sustainable free cash flow, we are well positioned to deliver enduring value for our shareholders. Achieving our target net leverage of less than 3x by the end of the fiscal year remains a priority. And looking into fiscal year 2027 and beyond, we will remain disciplined in our approach, maintaining a prudent capital structure that enables flexible and opportunistic deployment. On Slide 11, let’s now turn to our fiscal year 2026 full year outlook. As a result of Q1 performance, backlog of $47 billion, including $7 billion in funded backlog, up 23% from last quarter and with 95% of revenue expected to come from existing or recompete business, we remain confident in the outlook provided in November.

We are reaffirming guidance for the year, including revenue in the range of $13.95 billion to $14.3 adjusted EBITDA between $1.1 billion and $1.14 billion, adjusted diluted earnings per share between $2.25 and $2.45 and free cash flow between $525 million and $575 million. All metrics reflect healthy underlying organic growth and the primary guidance assumptions remain unchanged. From a timing perspective, we continue to expect quarterly sequential increases in revenue, adjusted EBITDA and adjusted diluted earnings per share as we move beyond the government shutdown and will benefit from additional working days in the remaining quarters. To assist with modeling, we have included a breakout of working days by quarter in the appendix. And I will also note that for Q2, consensus estimates are in line with our expectations.

From a free cash flow perspective, as previously shared, we have seen a rebound in collections and therefore, expect approximately 25% of our to-go free cash flow generation in the second quarter. Wrapping up on Slide 12. We are pleased with our start to the year, which reflects our ability to deliver solid results through disciplined operational execution and strategic focus. With continued robust bookings, strong market demand signals and progress towards our leverage reduction goals, we are confident in achieving our full year outlook and in positioning Amentum for sustained value creation. With that, operator, please open the line for questions.

Q&A Session

Operator: [Operator Instructions] Your first question comes from Colin with Cantor.

Colin Canfield: Travis, do you mind focusing on the free cash flow progression through the year and maybe talk about Cogniz, how you think about this quarter’s performance, second half performance and then maybe discussing how you think about potentially selling receivables in order to kind of bolster the free cash flow that…

Travis Johnson: So as stated in my prepared remarks, there were 2 primary drivers for Q1 cash performance, both of which were simply timing related and have no impact on our expectations for the full year. And so first, as noted on our last earnings call, we had an additional pay cycle relative to Q1 of last year, which obviously will normalize as we move through the rest of the fiscal year. And second, there was an unexpected government holiday closure, which you guys may be familiar with. So the administration gave government employees an additional 2 days off in addition to Christmas and New Year’s at the end of December and headed into the new year. And so that pushed some collections into the first part of January due to delays in customer approvals and processing.

So really, again, just timing related and perhaps to provide some more context, Collections in the first week of the second quarter were $100 million higher than they were in the first week of Q2 of last year, kind of just reemphasizing that it was just collections timing that was pushed due to delays in approvals. And so looking ahead for the rest of the year, given the rebound we’ve already seen in the beginning of the second quarter, we’re confident in achieving results that are in line with the guidance that we reaffirmed for the full year with the midpoint being at $550 million. And roughly 25% of that to go free cash flow, we do expect in the second quarter. And then obviously, Q4, as it always has been, will be our strongest free cash flow quarter as a result of our alignment with government at fiscal year-end.

And then just to touch on your comment on AR factoring. As you’re aware, we do have an AR factoring program in place, and we do leverage that to manage working capital as we move throughout the year.

Colin Canfield: Got it. That’s great color. And then maybe following up, if you can kind of refresh how you think about the award outlook by end market, particularly focusing on unfunded awards and how you think about kind of the magnitude and timing of those funded awards.

Travis Johnson: Sure. I’ll start with just saying you noticed that we had an uptick in funded backlog during the quarter. It’s something we’ve talked about really since last year, and we saw some administrative delays on the contracting side just with having funding. So we’re pleased to see that bounce back up to nearly $7 billion, a 23% increase from Q4. But as we’ve said, we’re comfortable with funded backlog in that range of $5 billion to $7 billion with what it means for the rest of our full year outlook. And in terms of kind of looking ahead, obviously, with $23 billion in pending awards and $35 billion or more of bids expected to be submitted this year. We’re on track to achieve our full year book-to-bill greater than 1.

And a lot of those key awards, we expect will come from the accelerating growth markets that John highlighted in his prepared remarks. In fact, just this quarter, we had over $1 billion in awards in our global nuclear energy business. So really highlighting the strength of that piece of the portfolio. And I’ll just mention, I think the kind of history of our consistent book-to-bill performance speaks for itself, right? 5 straight quarters of book-to-bill 1x or greater, including imputed book-to-bill of 1.3x on an LTM basis.

Operator: [Operator Instructions] Your next question comes from Tobey with Truist.

Tobey Sommer: I wanted to ask a question about nuclear, where you’ve had a nice string of new business announcements. How do we think about how that folds into the P&L and starts to contribute to revenue and profit growth? And then I was wondering if you could comment on what nuclear bids either submitted or sort of pipeline looks like — and is it indicative of more rapid growth there versus the overall metrics for the firm?

John Heller: Well, the first thing that we highlight is, I think we highlighted in the prepared remarks just the fact in Q1 with $1 billion of awards in the nuclear space, and given the fact that nuclear of our over $14 billion business represents just over $2 billion, you can see we’re making really good progress and see acceleration in that market overall as it relates to our portfolio. But of course, we’re $14 billion. So it’s going to take time to see the nuclear business really have a significant impact on, say, quarter-by-quarter. But on a year-by-year basis, we do expect these accelerating growth markets, including nuclear space and digital, all to have a positive impact on margins. We’re still looking for margin improvement year-over-year.

It’s going to be driven by those 3 areas, and nuclear is certainly stepping up and contributing there with the contract awards we announced, including kind of EDF and the Netherlands contract award. And of course, we announced Rolls-Royce, but that was an award after the quarter. So we’re continuing to see progress on the nuclear side, and we would expect that to be a big story for the business with the European market still robust as we’ve talked about a couple of big awards there this quarter. But the U.S. market is just really starting to accelerate as these bigger deals, new starts extensions for existing plants and the SMR market are all starting to get some momentum, and we have a lot of inbound demand in these areas. But that’s probably going to take a few more quarters to see the money come together, those projects get green lit.

But nonetheless, we are working with a lot of companies that are working to put these U.S. projects on track to begin. So that’s going to really help accelerate the future. And of course, just the final point I’ll make is the time line on these — the upfront work on a nuclear project is typically in the engineering the governance, getting regulatory approvals, preparing for construction. And then the revenue on these projects accelerates quite a bit once you move into construction. And that can take anywhere from 1 to 5 years to move into those stages. So these are really 5- to 10-year projects, which then have a kind of a tail that can go decades. But in terms of getting to the peak, it usually takes 2 to 5 years to see the peak revenue opportunity on nuclear.

Tobey Sommer: When you look at your bids submitted and pipeline for the whole firm, is there an embedded favorable mix shift from a margin perspective based on the complexion of those bids and pipeline?

Travis Johnson: Tobey, this is Travis. I would characterize it like this. Obviously, we’re starting to strategically prioritize higher-margin work, both in the accelerated growth markets that John highlighted, but also in our core markets, right? We still have $10 billion worth of the markets which we’re a leader in, great work and still growth opportunity there. But we’re also looking to expand margins in that part of the portfolio, which will be a big part of the story. And as we look at the bids going in, including things like contract mix, we are certainly seeing a shift over time. As we’ve stated, it will take time with $47 billion in backlog, right? It’s a big shift this year, but we are seeing that. And you’ll see in our contract mix composition in the 10-Q, you’ll see we’ve started to progress towards a higher percentage of fixed price work. So we are starting to see that as awards and that strategic shift and prioritization unfold.

Operator: Our next question comes from Seth with JPMorgan.

Seth Seifman: I wanted to ask in cash flow about the investing cash flows that go into the JVs. It’s a significant amount in the quarter. How do we think about those cash requirements going forward and how they should be relative to your CapEx and free cash flow?

Travis Johnson: Yes, this quarter was abnormally large contributions to our equity method investments, and it’s really a direct result of the big joint venture awards that we had last year. They’re all kind of starting to ramp up. And at the initial phases of those joint ventures, you have initial capital contributions from partners and Amentum had our piece in that. The 2 larger ones for the quarter were in Fort Smith and our Hanford work. We don’t expect that level as we move throughout the rest of the year. And then you also saw some return of contributions, which we would also expect over time as those programs ramp up and mature.

Seth Seifman: Okay. Okay. Great. And then just a quick follow-up in Global Engineering Solutions. Obviously, very tight margin there historically in that mid-7% range and then nearly 100 basis points higher in this quarter. What happened there that would make us not think that this should be — that kind of the margin that we saw in Q1 is not sustainable in Global Engineering Solutions?

Travis Johnson: Yes. Certainly, the margin performance for the entire company and obviously led by Global Engineering Solutions was a highlight for the quarter. things like revenue and cash flow timing that are out of our control impacted from the government shutdown happened. Luckily, that’s behind us. But the margin performance is something we’re really proud of the team for delivering. And it wasn’t really just one area. It was — there’s a few different areas. First, it’s progress on our strategic objective to prioritize higher-margin work. And as I stated a little bit earlier, you’ll see in our 10-Q that we’ve got a higher percentage of fixed price work that contributed to that. Also, there was some mix benefits from the government shutdown and just the work that was impacted from the shutdown with some lower-margin work and obviously, continued benefits from our cost synergy initiatives and then overall, just strong program performance.

So a lot of different variables driving the positive outcome there for Global Engineering Solutions. And then as we look to the rest of the year, obviously, our implied to go margins at the enterprise level are in line with the midpoint of our full year guidance. But as you know, that contemplates a range of outcomes and the top end of that could be up to 8.2%. So we feel really good about the quarter and obviously, the path that we have to meet our full year objectives as it relates to EBITDA and EBITDA margin.

Operator: Your next question comes from Kristine with Morgan Stanley.

Kristine Liwag: John, we’re seeing over 100 gigawatts of industrial gas turbine power capacity to enter the market by 2030. And it looks like this capacity is expected to come in sooner than nuclear projects. I mean they’re a little bit of shorter duration than nuclear. I was wondering how applicable your core capabilities in nuclear is for these kinds of projects. I mean these are still fairly large builds. Is this an opportunity for you?

John Heller: Yes. Thanks, Kristine. And we’re very aware that to meet the power needs of the nation and frankly, the world, that you’re going to have to look and there’s a big article today, of course, in Wall Street Journal on coal, restarting coal plants, extending coal plants and other sources to create the bridge to where nuclear can step in. And our focus is on bringing that nuclear infrastructure online. And what you’re seeing and this administration is very active in supporting using kind of the existing infrastructure and bringing that infrastructure online that is more carbon-based while we bring these SMR or gigawatt size plant projects online in parallel. So we’re seeing projects being discussed and planned and the money coming together behind the overall plan to bring all this additional power online and nuclear is a huge part of that, which is going to keep us extremely busy.

So our focus is on that nuclear power, which is happening absolutely in parallel. And these types of projects are not necessarily behind the scenes. I mean you’re hearing about some of this with SoftBank getting involved in Japan and other large projects. And you hear about the nuclear element of that. But to get to the ability to have that nuclear power, which is 5, 6, 7 years down the road, you’re going to have to have some bridge power capability brought online. And that’s where you’re seeing this additional capacity you’re mentioning. But the nuclear projects are going to keep us very busy that they’re working on to really facilitate the accelerating demand. It’s going to go far beyond what these near-term fossil fuel projects can handle.

Kristine Liwag: Super helpful. And also on the DISA Compute As-a-Service contract that you won in the quarter, how is this structured? Are the economics of this contract similar to a traditional contract? And providing this as a service, is this business model also repeatable for the commercial end market?

John Heller: Yes. We’re excited about the DISA award. I think if you take it in a larger context, it’s one of the great examples of how the government is really focusing on trying to get to more outcomes-based contracting. And so it’s inherently on demand to provide compute capacity and power for DISA and their clients. And so that’s scalable kind of outcome-based, you can think in terms of not as an overall effort kind of fixed price, but rather a unit-based fixed price that allows us to deliver outcomes. And it’s — we think it’s a great contract model, very much in line with how the government is trying to modernize procurement models. And so we think it is a structure that could replicate across other opportunities.

Operator: Your next question comes from Ken with RBC Capital Markets.

Kenneth Herbert: Travis, maybe I wondered if you can size the mix impact on margins in the quarter. I think you called that out as a headwind as a result of the shutdown and some of the maybe lower-margin work that wasn’t booked in the quarter, wasn’t billed in the quarter. How do we think about that? And how do we think about that then playing out as we think about the progression of margins through the remainder of the year?

Travis Johnson: So between kind of the 4 drivers that I mentioned earlier being just overall strategic progress to prioritize higher-margin work, which means that we have lower margin work falling off and we’re winning work that’s coming online that’s higher margin. The kind of onetime impact from the quarter of the mix from the government shutdown impact, realized cost synergies and then strong program performance, it was really, especially in Global Engineering Solutions, kind of evenly spread across those drivers. So not one kind of outsized contribution relative to those 4 things, but rather a combination of all of them. And then as we look to the rest of the year, again, the midpoint of our guidance is 7.9%, but the whole range contemplates EBITDA margins up to 8.2%.

So obviously, we put out guidance that contemplates a range of different outcomes. And while we’re pleased with the Q1 performance, we’re obviously just being prudent in our approach to look at the variety of outcomes that could happen for the year.

Kenneth Herbert: And maybe as a follow-up, John, to some of your comments on the space market in the prepared remarks. As we track your progress here, obviously, we’ll see the releases. But are there 1 or 2 things, whether it be launch activity or other aspects of this market as they evolve that you’d call out as maybe better or more indicative of how you could ramp in the space market more broadly? I’m just trying to get a sense as to what you view as perhaps some of the most important indicators as we track this moving forward.

John Heller: Yes. No, we’re really excited to highlight that this quarter. Our teams are working across the space domain in very different areas that we outlined in the presentation. We thought that would be really good to share. I’m glad that you brought that up because we were really excited to make that a centerpiece of the quarter. And our position in the market is really built on long-standing roles and mission-critical programs, really on missile warning systems, missile defense, space domain awareness, command and control. I mentioned programs like IRES and NIS2, great examples of our advanced engineering sustainment hypersonic and ballistic missile development, another area. We recently won a contract to support the U.K.’s hypersonic program.

We’re real excited about that. So we see that the strength of our history positions us in these areas that we highlighted. And we think there’s some real good opportunities as obviously, the U.S. government is very much focused in these areas. The space race is real with China, the opportunity to get back to the moon and Artemis II, Mission and then Artemis III. So a lot of things happening that align well with our strengths.

Travis Johnson: Yes. Maybe just to add a quick a little bit of context to John’s remarks, I think that we very much see that — back to your question, it’s — for us, it’s not a single opportunity or I would even say it’s not a single part of the system life cycle. As John indicated, it’s really kind of more of a broad approach to the opportunities across the space market. We broke it into satellites launch, SATCOM and integrated systems. And today, we’re driving those critical missions with Missile Defense Agency and other parts of the Department of Defense, but even NASA. And so we’re excited about really the in-house expertise that we’ve built across these critical missions. I think the real theme at this point in time is all of these critical missions are becoming more complex.

And so a partner that can deliver agile and scalable systems, all these missions require more rapid tech insertion — and that’s really the momentum team that we’ve built in the space portfolio. And moving forward, there’s just 3 things that give us a lot of optimism. I think, number one, if you look at where we’re deploying our proven expertise today, we’re deployed in areas where the spending is becoming more durable. That’s something we see across the missions we’re supporting. Secondly, we are excited about we are on and hold the right contract vehicles. We talked about existing DoD and NASA contracts. Of course, we picked up a position on the Shield contract where we’ll have the chance to compete and win work in support of Golden Dome.

Even recent months, we’ve had the nice new win on the COSMOS contract with NASA, where we’re waiting for protest disposition. But all these things give us kind of line of sight on growth in ’26 and into ’27. But maybe in the biggest picture, the third point we’re excited about is all the capabilities we at Amentum have developed in-house translate across these missions, whether it’s national security space, whether it’s deep space exploration or even some of the emerging commercial opportunities. And we’ve really worked on networking that expertise to be able to bring the best solution to all of these opportunities in the space market.

Operator: [Operator Instructions] next quesiton comes from Trevor with Citizens.

Trevor Walsh: Great. Can you maybe just bridge some of the comments, Travis and John, that you made around kind of the timing of the nuclear contribution and then just the overall new business that’s coming in for ’26. It sounds like that’s probably not so much a factor of kind of the revenue that’s beyond the visibility that you had from kind of new — excuse me, from the existing contracts. Just how are you bridging that kind of upside or the extra? Is that coming from — what’s that coming from? And what are the puts and takes around the — what could be the got you there as far as not kind of meeting your expectations?

John Heller: Yes. I’ll just make a quick comment. Maybe Travis can get into the numbers, but a quick comment that’s a little tongue and cheek on the industry. But 21% of our revenue right now is non-U.S. government. In the U.S. government, we still have protests on new awards. We’ve mentioned we have $2 billion of new awards sitting in protest. So our BD engine is working. We’re really excited with our strategy that we’ve outlined. Our win rates are strong and our backlog is growing, but we have protests. But what’s interesting is in the non-U.S. government business, we really have no protests, right? So we’re able to transition those awards, whether it’s in the nuclear space or foreign government space, immediately into revenue and contribution to margin improvement.

And so that’s kind of another exciting part about the nuclear market is we announced $1 billion of awards. We still have the Rolls-Royce that came in after. We have other things happening in our nuclear market really excited about, and we’re not seeing any protests. So we get to translate that into project work and see that contribute. But of course, in ’26, as Travis said, we only have about 5% of new business to fill the gap. But if you can get the work that we’re winning in our accelerated growth markets started that can have a greater impact on the fiscal year.

Travis Johnson: Yes. And I’ll just add. I think John covered it really well. But as we look at kind of bridging Q1 to the rest of the year run rate, there’s really just a couple of mechanical things that are going to get us there. Obviously, first and foremost, there’s going to be no government shutdown impact in the remaining quarters, and that was roughly $150 million. We’re also going to benefit from additional working days in the remaining quarters. So in Q1, there were 60 working days. In Q2 and Q3, there will be 63 working days. And in Q4, there’s 64 working days. So just kind of math on average daily run rate, right, that’s an additional $150 million a quarter. And then obviously, the other net organic contributions, including things like ramp-up of new contract awards.

We mentioned our Space Force Range contract previously that only had 1 month worth of revenue in the first quarter, and we’ll obviously have full quarter benefit in the remaining quarters. So fairly simple bridge to kind of get you to how we see the rest of the year playing out. And then in terms of where we fall within the guidance range, I think John hit it really well. It’s really just continuing to submit high-quality bids and expect to still submit over $35 billion this year. But we have $23 billion in pending awards, and we have pretty good visibility into those, but there can always be variability of timing of those and then, of course, process, as John mentioned. So I’d say if we’re looking at variability within kind of our guidance ranges, it would be just that and how does that play out during the rest of the year.

Operator: Your next question comes from Mariana with Bank of America.

Mariana Perez Mora: So the first one is going to be about — you mentioned the Golden Dome Shield contract that you have been down selected. We haven’t seen much awards yet. How are you thinking about timing of those awards and opportunities?

John Heller: Yes. We — I think for us, the Golden Dome story begins with kind of what we’re doing today. In January, General Guetlein, Pentagon’s appointed leader for the whole Golden Dome system realization, he made some great comments about the priorities for the first 2 years, and he really focused on the baseline command and control capability for this integrated system of systems that is Golden Dome, incorporating interceptors into the systems. And so if you look at momentum today, we’re already doing a lot of work that’s I’ll say, bringing that to life. We’re supporting certainly the Missile Defense Agency. John mentioned our IRES contract, where we’ve established now the digital backbone that’s going to allow those systems to be integrated into our missile defense architecture and even developing prototype systems like as has been in the media, the hypersonic tracking and ballistic space sensors, those prototype systems we’re working to bring to life.

And so already in conjunction with the Missile Defense Agency, Amentum is doing a lot of that work. And I would quickly mention our work also with the Space Force in their NORAD mission, where we’re advancing their ability to detect and track and have missile warning capabilities. That is — we are continuing to sustain and advance their systems to carry out those parts of the missions. And so we at Amentum are even on our current contract seeing tasking that is relevant to the future solution that is golden done. And so in parallel, as you correctly mentioned, now we, along with many other companies, have a seat on the Shield contract. We have begun just to see some of the plans for some of the procurements that will come out under Shield.

We, like others, are positioning for those. And so we do expect as we progress into ’26, that we’ll see increased activity there. And — but we’re excited about the current work and the view ahead on the upcoming procurements.

Mariana Perez Mora: And then if we can switch gears to NASA. Earlier this week, they announced the solicitation for the second iteration of like NASA engineering support contract that you guys have. And I understand you probably cannot comment on like a particular contract, but how should we think about opportunities and challenges going on for your NASA exposure going forward, especially as we think about like new leadership and a focus on more like commercial terms, the same that we’re seeing at the Department of W. Like what are the opportunities and challenges there and competitive dynamics going forward?

John Heller: Yes. We really pleased that we’ve had the chance even just within the past couple of weeks to meet with the new administrator and his team. And at the top level, let me just say we’re excited to continue supporting NASA to achieve the President’s National Space policy goals and maintain U.S. leadership in space exploration, and everybody is aligned around that. And even more specifically, just within the past couple of weeks, we’ve enjoyed interacting with the new NASA leadership at the Kennedy Space Center in Florida, where the integrated team is working to prepare for the Artemis II mission. And if you’re following, it’s now slated for the March launch window. And so we’re very proud of our current role in supporting NASA with this historic mission, which, by the way, will take humans deeper into space than they’ve ever before traveled and we’ll bring them home safely.

So rest assured that proper preparation for Artemis II is a priority for us. Administrator Isaacman, he did recently, just as you noted, he committed to say, “Hey, NASA has got to focus on rebuilding internal talent, strengthening contractual provisions and fostering their culture of technical resilience.” These are all positive objectives, and we are fully in alignment. NASA has a unique leadership role in the world and never before in history has it been more important that NASA lead in this area. So we’re very excited about that. I think for us, as we’ve interacted with new NASA leadership, — the administrator, we think, is focused on pushing the agency to deliver successful missions to do that in alignment with cost constraints as well as schedule imperatives.

We at Amentum, we believe our proven expertise, coupled with our highly advantaged cost posture, we think we’re positioned. We’re a big part of those solutions today, but we can, we think, even be a bigger part of that in the future. So we’re really excited about the direction of the agency under administrator Isaac and it’s leadership. And I just want to close by having been at Kennedy with our team and the NASA team and seeing the preparations for ARTEMIS II. We are really thankful for that team, how they’re approaching every aspect of the mission to ensure it’s executed safely and well. And I know all eyes of the nation will be on tap as we undertake that historic mission in March.

Operator: Your next question comes from Gavin with UBS.

Gavin Parsons: You pointed out U.S. nuclear is still in early stages of acceleration. And I think I heard you say maybe a few more quarters until we see some tangible progress there. Is that the time frame we should expect for some potential award announcements?

John Heller: Yes. I would say there’s a lot of activity. We are extremely busy. We haven’t made any announcements, but trust me, our team could not be busier given the support of this administration as well as the need, the demand that is there from the hyperscalers and the whole community, understanding that energy and meeting the energy needs of our industry is a national security issue. So it’s all hands on deck, great relationship with the government and commercial business as well as foreign investment and really working together to allow this to happen in the United States, this resurgence of nuclear, call it, the second nuclear renaissance and bringing that on. And part of it is the excitement around small modular reactors, right?

So SMR development is really happening. We have in the U.S., some great companies that are leading that effort. And for Amentum, we’re working with these companies. And we’re a key part of the supply chain to allow these projects to happen. We’re doing that in Europe. We have all that expertise. We’ve been working in the nuclear industry going back to the Manhattan project here in the U.S. at developing next-generation energy capability here in the U.S. and now seeing the demand for electricity and bringing nuclear back on, Amentum is extremely well positioned to be a part of that success here in the U.S. So, we think ’26 is going to see some real progress and that will really create momentum into ’26, ’27 and beyond.

Gavin Parsons: Okay. That’s great. And then just back to the shutdown impact briefly. The full year assumes some headwind. I think the first quarter was a little bit light of where you guys guided. Was that larger shutdown impact than you expected? And what gives you confidence that, that can be recaptured this year instead of slipping to the right?

Travis Johnson: Yes. So when we issued guidance back in November, we contemplated an approximate 1% impact from the government shutdown. And that kind of played out with the majority of that occurring in the first quarter as we stated. So it was in line with kind of what our expectations were when we set the guidance range, which obviously is the reason why we reaffirmed the guidance. But we’re really confident with, again, only 5% of revenues expected to come from new business, 93% is firm, only 2% recompete. And with the $23 billion in pending awards, we have good line of sight into where the revenue is going to come from for the rest of the year.

Operator: Your last call is from Andre with BTIG.

Andre Madrid: In much of the same way that you previously broke down the different pieces of the nuclear end market, are you willing to share just how big each of the 4 space end markets are for you now and how big they could become?

Travis Johnson: I think that it’s a great deeper look into the way we’ve laid out the space market. I’ll be forthcoming. The way we are kind of omnipresent across all of those areas, it can be a little bit challenging to segregate revenue between the 4. I think that you could argue that the majority, if not all of our revenue in the space market kind of all points towards that integrated systems bubble where — or segment of the market where we’re — whether it’s front-end design all the way through development, integration and test, all of it headed toward integrated systems. But the other piece that we’ve got to factor in, that’s really a new term in our momentum equation is the Space Force Range contract, where we are today now have just ramped up that contract and are having such an increased activity in the launch portion of the total market.

And so we think as we get to a little bit of normalization moving forward, it will be a much easier task for us to quantify exactly where the revenues fall in the 4 buckets.

Andre Madrid: Got it. Got it. That makes sense. And then I guess just to zoom out into just the accelerated growth markets overall. Are you able to provide a book-to-bill for those markets as a collective? And maybe just through that, talk about more of the opportunities you’re seeing there?

Travis Johnson: Yes. On the book-to-bill, and I’ll let John elaborate on the opportunities moving forward. Obviously, Q1 was a highlight, over $1 billion or right around $1 billion of the $3.3 billion in net bookings tied to just the global nuclear energy part of the accelerating growth market. So I think it’s fair to say, if you look at over the last 12 months, there’s been proportionately outsized contribution from our accelerating growth markets, as you would expect with awards such as Space Force Range, a lot of the other international nuclear opportunities. So certainly, they are the leading factor in our book-to-bill performance. That said, we still are excited about what our core growth markets are contributing, and they continue to have robust bookings as well.

John Heller: We’re — we don’t divide the book-to-bill. And what we did this quarter did say we had $1 billion of nuclear awards. We will continue to kind of share some of the color on where these awards are coming from. We think the one highlight of what — of momentum is that we have been delivering what we say we’re going to deliver. We have been consistent. This team has developed a very solid strategy. We’ve used the last 2 quarters to share that strategy with the marketplace. It is working. It is delivering. We think the diversification of momentum is a key strength. And we’re showing that across our core markets and across our accelerating growth markets, our ability to compete on the largest and most complex contracts in these areas.

And I think as we go forward, we will continue to share more detail. Things are happening in the digital infrastructure market. We’re going to talk about that next quarter. We talked about the global nuclear last quarter. We talked about Space Systems and Technologies. And we’re seeing momentum in these accelerating growth markets as well as continued strength in our core markets that we’ve been delivering for decades. So yes, we plan to continue to share more of the details aligning to these accelerating growth markets as we go forward. And because we just see our pipeline is shaping up across these areas between core and the 3 accelerating growth markets, which is part of our strategy to continue to prioritize the higher-margin areas while still taking advantage of our leadership position in the core markets.

So we’re excited about how the pipeline is pulling together and our focus on new business scale are all starting to work and pay off, and we saw it in margins this quarter, something we couldn’t control with respect to additional days off for the government that impacted our cash. But in things that we can control that tie to our strategy, we continue to deliver, and I’m really proud of what this team is doing every quarter to live up to the expectations we’re setting in the marketplace.

Operator: Thank you for joining today’s call. There are no further questions at this time. Thank you for joining. You may now disconnect.