KBR Achieves Notable Growth in First Quarter Results

KBR Reports Impressive Performance in First Quarter

Delivering strong financial results, bolstering major projects and securing new contracts

Over $150 million in share repurchases during the quarter

First Quarter Highlights
(All comparisons to the first quarter of the previous fiscal year unless noted.)

• Revenues reached $2.1 billion, reflecting a 13% increase.
• Net income attributable to KBR stood at $116 million, with Adjusted EBITDA climbing to $243 million, representing a 17% improvement and an Adjusted EBITDA margin of 11.8%.
• Diluted earnings per share (EPS) was $0.88, while Adjusted EPS increased by 27% to $0.98.
• Bookings and options totaled $1.4 billion with a solid book-to-bill ratio of 1.0x (1.1x on a trailing-twelve-month basis).

Guidance for Fiscal Year 2025

• The outlook previously provided remains intact.

HOUSTON - In a recent announcement, KBR, Inc. (NYSE: KBR) reported robust first quarter results for fiscal 2025, showcasing a noteworthy trajectory in both growth and operational efficiency.

“Our first quarter performance exemplifies KBR's ongoing commitment to delivering value,” stated Stuart Bradie, President and CEO. “We've achieved significant revenue growth year-over-year, improved margins, earnings, and cash flow, alongside strong performances on our major projects. Elevated demand for LNG continues to benefit us, particularly from the Plaquemines project, enhancing our profit margins and cash flow. Moreover, our HomeSafe service has seen increased customer engagement and satisfaction.”

Bradie noted that despite market volatility, KBR has not observed significant cuts to programs or contracts, especially within the U.S. government sector. The company has maintained agility amid varying customer demands, thanks in part to its effective segment realignment strategy and focused cost management.

The company executed one of its largest share buybacks, exhibiting confidence through a $750 million program authorized by its board. “We uphold a robust portfolio consisting of multi-year projects that open multiple growth channels as we expand across various regions and markets,” he added.

KBR's backlog and options at the end of the quarter amounted to an impressive $20.5 billion. The company is progressing well with its strategy of collaborative partnerships aimed at resolving complex customer challenges.

Detailed Overview of First Quarter Financials

Revenues totaled $2.1 billion, marking a $237 million increase primarily driven by the Defense & Intelligence sector and the LinQuest acquisition, alongside growth in Readiness & Sustainment services. Operating income rose to $195 million, a $29 million improvement, primarily attributable to increases in gross profit and shares in earnings from unconsolidated affiliates related to successful LNG project execution.

Net income attributable to KBR exhibited a 25% increase to $116 million due to elevated operating income while diluted earnings per share reached $0.88, a 28% increase driven by reduced share count amid a buyback strategy.

Adjusted EBITDA of $243 million indicates a robust growth of $36 million and aligns with higher operating income levels. The adjusted EBITDA margin reflects strong operational performance, increasing to 11.8% compared to previous figures.

KBR's segmented revenue breakdown highlights Mission Technology Solutions generating $1,505 million, an increase of 14%, propelled by the growing Defense & Intelligence demand.

Sustainable Technology Solutions reached $550 million, up 12%, boosted by the rising demand for sustainable innovations and services.

Liquidity and Shareholder Returns

As of the last quarter, KBR maintained liquidity of about $917 million, including $442 million in cash and equivalents and $475 million in borrowing capacity. The net leverage ratio stood at 2.6x.

During the first quarter, KBR effectively returned $176 million to its shareholders through share repurchases and regular dividends. This depicts a strong commitment towards enhancing shareholder value.

KBR reaffirms its fiscal year 2025 guidance, projecting revenues in the range of $8.7 billion to $9.1 billion, with Adjusted EBITDA estimated between $950 million and $990 million, alongside adjusted EPS anticipated to hit between $3.71 and $3.95.

Segment Realignment for Improved Efficiency

To optimize operations, KBR has restructured its segment reporting, with the Government Solutions segment now named Mission Technology Solutions, partnering closely with Sustainable Technology Solutions, which retains its name. This strategic approach aims to better reflect operational focuses and facilitate enhanced reporting practices.

About KBR

KBR is renowned for delivering cutting-edge science, technology, and engineering solutions to clients globally, employing approximately 38,000 personnel across over 80 countries. The commitment to collaboration ensures KBR not only meets but exceeds customer expectations, enabling robust service delivery and performance.

Frequently Asked Questions

1. What were KBR's revenues in the first quarter of fiscal 2025?

KBR reported revenues of $2.1 billion for the first quarter of fiscal 2025, representing a 13% increase compared to the previous year.

2. How much was the net income attributed to KBR?

The net income attributable to KBR was $116 million in the first quarter of fiscal 2025, showing a 25% increase year-over-year.

3. What is KBR's guidance for fiscal year 2025?

KBR's guidance for fiscal year 2025 projects revenues between $8.7 billion and $9.1 billion, with Adjusted EBITDA expected to be between $950 million and $990 million.

4. How much capital did KBR return to shareholders in the first quarter?

KBR returned approximately $176 million in capital to shareholders through share repurchases and dividends in the first quarter.

5. What is the significance of the segment realignment at KBR?

The segment realignment aims to streamline operations and reporting, enhancing efficiency and clarity in KBR's operational focus and performance measures.

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