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Oct 03, 2025
KBR Q3 2025 Earnings Report
KBR reported its third quarter fiscal 2025 results, showing double-digit Adjusted EBITDA growth and strong cash conversion despite revenue headwinds.
Key Takeaways
KBR delivered a robust third quarter in fiscal year 2025, achieving $1.9 billion in revenue and a net income of $115 million. The company demonstrated strong operational performance with a 10% increase in Adjusted EBITDA and a 21% rise in Adjusted EPS. Despite minor revenue declines, KBR maintained a healthy book-to-bill ratio of 1.4x and improved its net leverage, reflecting effective cost management and strategic focus.
Revenues for the third quarter were $1.9 billion, remaining flat compared to the prior year, primarily due to slower award pace and EUCOM reductions, offset by growth in Defense & Intel.
Net income attributable to KBR increased by 15% to $115 million, driven by higher operating income.
Adjusted EBITDA grew by 10% to $240 million, with an Adjusted EBITDA margin of 12.4%, indicating strong operating performance.
Adjusted EPS rose by 21% to $1.02, benefiting from increased Adjusted EBITDA and reduced diluted weighted average common shares outstanding.
Revenue by Segment
Forward Guidance
KBR is revising its fiscal year 2025 guidance due to a slower pace of awards across both segments and delays in resolving bids won under protest, impacted by the U.S. Government shutdown.
Positive Outlook
- Adjusted EBITDA guidance remains stable at $960M - $980M, indicating confidence in profitability.
- Adjusted EPS guidance is maintained at $3.78 - $3.88, reflecting consistent earnings expectations.
- Operating cash flows guidance remains strong at $500M - $550M, highlighting continued cash generation.
- The company's diverse portfolio and focus on operational priorities are expected to provide stability.
- 60% of Adjusted EBITDA from non-U.S. government customers helps mitigate risks during government shutdowns.
Challenges Ahead
- Revenues guidance has been revised downwards from $7.9B - $8.1B to $7.75B - $7.85B.
- Slower pace of awards across both Mission Technology Solutions and Sustainable Technology Solutions segments.
- Resolution of bids won under protest will be delayed due to the U.S. Government shutdown.
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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