KBR, Inc. announced its fourth-quarter and fiscal 2025 financial results.

KBR, Inc. (NYSE: KBR) today announced its fourth quarter and fiscal 2025 results.

"Fiscal 2025 was a year of disciplined execution for KBR as our teams delivered strong operational and financial performance despite a challenging award environment," said Stuart Bradie, President and Chief Executive Officer.

"We expanded margins, generated robust cash flow, and grew backlog and options while continuing to advance our strategy toward higher-value, technology-enabled, and recurring work. Importantly, we also made meaningful progress on the planned spin-off, sharpening the strategic focus of each business and positioning both companies for long-term value creation. As we enter fiscal 2026, we are confident in our outlook, supported by strong backlog coverage, improving award momentum, and the continued commitment and performance of our people."

Fourth Quarter Fiscal 2025 Consolidated Results Review

(All comparisons against the fourth quarter fiscal 2024 unless noted.)

Revenues were $1.9 billion, down 11% or $223 million, due to the slower pace of awards and contingency EUCOM scope reductions.

Operating income was $191 million, up 36% or $51 million, primarily due to increases in Equity in earnings of unconsolidated affiliates, decreases in Selling, general and administrative expenses, and a $26 million resolution of an outstanding contract dispute associated with a legacy U.S. government project that did not recur in the current year.

Net income attributable to KBR was $111 million, up 46% or $35 million, primarily due to increases in Operating income noted above and decreases in Interest expense, partially offset by increases in Provision for income taxes.

Diluted earnings per share attributable to KBR were $0.87, up 53% or $0.30, in line with increased Net income attributable to KBR noted above and lower diluted weighted average common shares outstanding due to open market share repurchases.

Adjusted EBITDA2 was $238 million, up 5% or $12 million, primarily due to strong project execution, favorable mix and prudent cost management. Adjusted EBITDA2 margin was 12.6%, up ~190bps in line with the above.

Adjusted earnings per share2 were $0.99, up 10% or $0.09, due to the increase in Adjusted EBITDA2 noted above and lower adjusted weighted average common shares outstanding due to open market share repurchases.

Backlog and options as of the quarter end totaled $23.2 billion, up 13% from the prior year. Book-to-bill1 was 0.9x for the quarter.

Fourth Quarter Fiscal 2025 Segment Results Review

(All comparisons against the fourth quarter fiscal 2024 unless noted.)

Mission Technology Solutions (MTS)

Revenues were $1.3 billion, down 14% and $213 million, due to contingency EUCOM scope reductions and procurement delays across U.S. Government Defense and Intelligence clients, funding restrictions from U.S. Government Federal Civilian clients, and delays in new awards, including awards won under protest. Revenues from International Government clients and Commercial clients remained largely consistent with the prior year.

Operating income was $118 million, up 44% and $36 million, due to a $26 million resolution of an outstanding contract dispute associated with a legacy U.S. government project that did not recur in the current year and decreases in Selling, general and administrative expenses driven by the decline in Revenues and cost savings from the segment realignment announced in January 2025. Operating income margin was 9.1%.

Adjusted EBITDA2 was $145 million, up 4% or $6 million, due to strong project execution and favorable mix, along with disciplined management of Selling, general and administrative expenses. Adjusted EBITDA2 margin was 11.2%, up ~198bps from the prior year.

Backlog and options as of the quarter end totaled $19.1 billion, up 15% from the prior year. Book-to-bill1 was 0.5x for the quarter reflecting award cadence timing.

The following new business awards were announced:

Awarded an estimated $117 million cost-plus-fixed-fee follow-on contract to provide Foreign Military Sales support to NAVAIR's F/A-18 and EA-18G Program Office

Awarded a technical support services contract by the U.S. Geological Survey with a $350 million ceiling to support operations at the Earth Resources Observation and Science Center

Awarded two firm-fixed-price task orders totaling $103 million to support strategic decision-making, capability development, and personnel readiness for the U.S. Space Force and Department of the Air Force

Awarded a $77 million firm-fixed-price task order under the U.S. Space Force Decision Support for Headquarters Analysis contract to advance digital engineering and assured communications in support of AFRL and Space Systems Command modernization

Awarded a cost-plus-fixed-fee contract with a $149 million ceiling under the AFLCMC ADEDDIS program to deliver analytics, digital transformation and systems engineering supporting operator readiness at Eglin Air Force Base

In addition, MTS announced the following positions on IDIQ contracts that provide competitive differentiation and future growth potential:

Awarded a seat on the Missile Defense Agency's SHIELD contract, a $151 billion ceiling vehicle supporting homeland and layered missile defense

Awarded a seat on the NAVSUP WEXMAC 2.1 – Territorial Integrity of the United States contract, a $10 billion ceiling vehicle supporting expeditionary logistics and contingency operations

Sustainable Technology Solutions (STS)

Revenues were $590 million, down 2% or $10 million, driven by delays in new awards as customers reassessed capital allocation, including reduced petrochemicals capex and a pause in certain green projects with increased emphasis on affordability and energy security.

Operating income was $117 million, up 17% or $17 million, primarily due to increases in Equity in earnings of unconsolidated affiliates due to strong project execution on an LNG project and prior year losses on the legacy Ichthys project that did not recur in the current year, partially offset by increases in Selling, general and administrative expenses related to business development growth and the implementation of a new enterprise resource planning system. Operating income margin was 19.8%.

Adjusted EBITDA2 was $121 million, up 3% or $4 million, due to strong project execution. Adjusted EBITDA2 margin was 20.5%, up ~101 bps in line with the above.

Backlog as of the quarter end totaled $4.2 billion, up 5% from the prior year. Book-to-bill1 was 1.6x for the quarter reflecting strengthening award momentum.

The following new business awards were announced:

Awarded a strategic 10-year digitally-enabled general maintenance services contract for Petro Rabigh's Polymer I and Polymer II plants in the Kingdom of Saudi Arabia

Awarded an integrated field management services contract by Basra Oil Company for the Majnoon Oil Field in southern Iraq to support production optimization and field modernization

Awarded a detailed engineering services contract to support Qatar's offshore development in the Bul Hanine oil and gas field

Awarded a detailed engineering design contract by ENKA Insaat ve Sanayi A.S. for the Associated Gas Upstream Project Phase 2, part of the Gas Growth Integrated Project in the Basra region of Iraq

Awarded a technology and engineering contract by IGNIS to support the development of a new green ammonia facility in A Coruña, Spain

Awarded a technology licensing and engineering contract for KBR's PureMSM green methanol technology by Fikrat Al-Tadweer to support a biomethanol facility converting landfill gas into clean fuels in Saudi Arabia

Awarded the front-end engineering design contract for Coastal Bend's planned natural gas liquefaction and export facility on the Texas Gulf Coast.

Additionally, during the quarter, KBR announced that its joint venture, Brown & Root Industrial Services (BRIS), has signed a definitive agreement to acquire Specialty Welding and Turnarounds (SWAT), a leading provider of turnaround, cooling tower and industrial catalyst services. This strategic acquisition creates one of the largest specialty welding and turnaround service providers in North America and supports KBR's strategy to grow recurring service revenue through unconsolidated joint ventures while maintaining a disciplined, capital-light operating approach. The transaction closed on January 6, 2026.

Balance Sheet, Cash Flow, and Capital Deployment

Liquidity as of January 2, 2026, totaled approximately $1.1 billion, comprising $605 million in borrowing capacity under the revolving credit facility and $500 million cash and cash equivalents. Net leverage ratio as of January 2, 2026, was 2.2x.

Operating cash flows from continuing operations for the quarter were $51 million, up 24% or $10 million. During the fourth quarter, KBR returned $46 million in capital to shareholders, consisting of $25 million in share repurchases (including withhold to cover shares) and $21 million in regular dividends.

On February 19, 2026, the Board of Directors approved a quarterly dividend of $0.165 per share, or $0.66 per share annualized, reflecting our focus on consistency and balance-sheet discipline during the spin transaction. The dividend is payable April 15, 2026, to shareholders of record on March 13, 2026.

The company does not provide reconciliations of Adjusted EBITDA, Adjusted EPS, and Adjusted Operating cash flows to the most comparable GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, and acquisition-related expenses without unreasonable effort, which could be material to the company's results computed in accordance with GAAP.

Management has provided the following assumptions related to fiscal 2026 guidance:

Capital expenditures: ~$40 - 50 million

Effective tax rate: 26% - 28%

Depreciation & amortization: ~$165 million (includes ~$45 million purchased intangibles amortization)

Adjusted weighted average common shares outstanding: ~127 million

Phasing: 46% 1H / 54% 2H

Strategic Intent to Spin Off Mission Technology Solutions

On September 24, 2025, KBR announced its intention to spin off its Mission Technology Solutions segment into a separate, U.S. publicly traded company. Upon completion, KBR and its shareholders are expected to benefit from ownership in two pure-play public companies with enhanced strategic focus, operational independence, and financial flexibility.

In connection with the planned separation, certain perimeter changes were implemented in fiscal 2026 to better align the businesses ahead of the spin-off, including the transition of Frazer-Nash Consultancy and the UK Civil Nuclear portfolio to Sustainable Technology Solutions. These changes will be reflected in KBR's fiscal 2026 SEC filings. Investors are encouraged to refer to the supplemental financial information available in the Investor Relations section of KBR's website, which has been recast to reflect these updates.

The planned spin-off is intended to be tax-free to KBR and its shareholders for U.S. federal income tax purposes and is targeting completion during the second half of 2026, subject to final approval by KBR's Board of Directors and other customary conditions. 

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