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Jul 04, 2025
KBR Q2 2025 Earnings Report
KBR reported solid financial performance in the second quarter of fiscal year 2025, with increased revenues, adjusted EBITDA, and adjusted EPS, despite navigating a volatile landscape and decision delays.
Key Takeaways
KBR delivered a strong second quarter in fiscal year 2025, with revenues reaching $1.952 billion, a 6% increase year-over-year. The company achieved double-digit growth in Adjusted EBITDA and Adjusted EPS, expanding margins and maintaining robust cash flow. Net income attributable to KBR was $73 million, while Adjusted EPS stood at $0.91. The company is revising its fiscal year 2025 guidance due to the HomeSafe Alliance JV contract termination and other factors.
Revenues increased by 6% to $1.952 billion, primarily driven by growth in Defense & Intel, fueled by the LinQuest acquisition.
Adjusted EBITDA grew by 12% to $242 million, with an Adjusted EBITDA margin of 12.4%, reflecting strong operating performance.
Adjusted EPS rose by 10% to $0.91, supported by increased Adjusted EBITDA and lower adjusted weighted average common shares outstanding.
Operating cash flows from continuing operations significantly increased by 38% to $217 million, with an operating cash conversion of 185%.
Revenue by Segment
Forward Guidance
KBR is revising its fiscal year 2025 guidance due to the HomeSafe Alliance JV contract termination, reductions in EUCOM and logistics, and protest resolution delays. The company also updated its long-term financial targets for fiscal year 2027.
Positive Outlook
- Fiscal Year 2025 Adjusted EBITDA guidance remains strong at $960M - $980M.
- Fiscal Year 2025 Operating cash flows guidance remains consistent at $500M - $550M.
- Fiscal Year 2027 Adjusted EBITDA target increased to $1.15B+.
- Fiscal Year 2027 Adjusted EBITDA margin target increased to 11%+.
- Fiscal Year 2027 MTS Adjusted EBITDA margin target increased to 10%+.
Challenges Ahead
- Fiscal Year 2025 Revenue guidance revised downwards to $7.9B - $8.1B from $8.7B - $9.1B.
- Fiscal Year 2027 Revenue target revised downwards to $9.0B+ from $11.5B+.
- Fiscal Year 2027 MTS Revenues CAGR revised downwards to 5% - 8% from 11% - 15%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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