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Jan 02
KBR Q4 2025 Earnings Report
KBR Q4 2025 Earnings Report
Key Takeaways
KBR reported a mixed fourth quarter for fiscal 2025, with revenues declining 11% year-over-year to $1.9 billion due to slower award pacing and scope reductions in EUCOM. However, the company demonstrated strong operational efficiency, significantly expanding margins and growing net income by 46%. KBR also announced progress on its strategic spin-off of the Mission Technology Solutions segment, expected to complete in the second half of 2026.
Net income attributable to KBR rose 46% to $111 million despite an 11% decline in total revenue.
Operating income margin improved significantly to 10.1% from 6.6% in the prior year quarter.
The company ended the quarter with a robust backlog and options total of $23.2 billion, up 13% year-over-year.
KBR is on track to spin off its Mission Technology Solutions segment as a separate public company in 2H 2026.
Revenue by Segment
Forward Guidance
KBR issued full-year fiscal 2026 guidance projecting growth across all key financial metrics at the midpoint, while preparing for the MTS segment spin-off.
Positive Outlook
- Projected revenue growth of 4% at the midpoint ($7.90B - $8.36B).
- Adjusted EBITDA expected to grow 4% at the midpoint ($980M - $1,040M).
- Adjusted EPS growth of 3% at the midpoint ($3.87 - $4.22).
- Strong operating cash flow guidance of $560M - $600M.
- Backlog and options of $23.2 billion provide strong visibility into future periods.
Challenges Ahead
- Anticipated effective tax rate remains high at 26% - 28%.
- Guidance phasing is weighted toward the second half (54% 2H).
- Ongoing uncertainty regarding the timing and final approval of the MTS spin-off.
- Potential for continued procurement delays in U.S. Government Defense and Intelligence sectors.
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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