Amentum Holdings, Inc. 10-Q Summary
Business Context and Reporting Period
This filing is a Quarterly Report on Form 10-Q for Amentum Holdings, Inc. (AMTM) for the period ended July 3, 2026. Amentum is a global advanced engineering and technology solutions provider serving U.S. and allied government agencies and commercial markets. The company operates through two reportable segments: Digital Solutions (DS) and Global Engineering Solutions (GES).
Key Financial Metrics
| Metric | Three Months Ended July 3, 2026 | Nine Months Ended July 3, 2026 |
|---|---|---|
| Revenues | $3,490 million | $10,205 million |
| Net Income (Common Shareholders) | $66 million | $164 million |
| Diluted EPS | $0.27 | $0.67 |
| Operating Income | $172 million | $461 million |
| Adjusted EBITDA | $290 million | $828 million |
| Cash from Operations | N/A | $235 million |
| Total Debt (Gross) | $3,875 million | $3,875 million |
| Cash and Equivalents | $459 million | $459 million |
| Backlog (Total) | $48.2 billion | $48.2 billion |
Material Changes vs. Prior Period
- Revenue: Revenue decreased 2.0% ($71 million) for the quarter and 2.5% ($263 million) for the nine months compared to the prior year. This was primarily due to the transition of contracts to unconsolidated joint ventures, fiscal year 2025 divestitures, and government shutdown impacts, partially offset by new contract awards.
- Profitability: Net income attributable to common shareholders increased significantly, rising 560% for the quarter and 531% for the nine months. This improvement was driven by a 67% increase in operating income (quarterly) and a 34% increase (nine-month), alongside a reduction in the effective tax rate (29.8% vs. 108.3% in the prior quarter).
- Cost Management: Selling, general, and administrative (SG&A) expenses decreased 26.1% for the quarter and 18.0% for the nine months, attributed to synergies from the Jacobs Critical Mission Solutions merger.
- Debt Restructuring: The company incurred a $16 million loss on extinguishment of debt due to an amendment of its credit facility and a $125 million voluntary principal payment on Term Loan B.
Outlook, Risks, and Management Commentary
- Guidance & Backlog: Total backlog increased to $48.2 billion, with $6.2 billion funded. Management expects to recognize approximately 79% of remaining performance obligations ($8.9 billion) over the next 12 months.
- Budgetary Environment: Management notes a constructive budget environment with potential increases in defense discretionary spending for GFY 2027. However, risks remain regarding the timing of appropriations and potential government shutdowns.
- Debt & Liquidity: The company amended its credit facility in April 2026, establishing a new $1.4 billion Term Loan A and increasing the Revolver to $1 billion. Available borrowing capacity stands at $917 million. The company remains in compliance with all covenants.
- Risks: Key risks include U.S. government investigations, reliance on federal funding, and the potential for contract modifications or terminations in joint ventures. There are currently no investigations expected to have a material impact.
Investor Verification Checklist
- Joint Venture Transitions: Verify the impact of transitioning contracts from consolidated to unconsolidated joint ventures on future revenue recognition and equity earnings.
- Government Shutdown Impact: Assess the extent to which the Q1 2026 government shutdown affected revenue timing and whether similar disruptions are anticipated.
- Debt Covenant Compliance: Confirm ongoing compliance with financial covenants under the amended Credit Facility, particularly regarding leverage ratios.
- Backlog Realization: Monitor the conversion rate of the $42 billion unfunded backlog into funded contracts and actual revenue.
- Tax Rate Volatility: Review the sustainability of the current effective tax rate compared to the statutory rate, considering valuation allowances on deferred tax assets.