Amentum Holdings, Inc. (NYSE: AMTM) is a global leader in providing advanced engineering and innovative technology solutions to a diverse range of government and commercial clients. With a rich history dating back to the 1940s, the company has evolved to become a trusted partner in tackling some of the most complex challenges across the defense, intelligence, space, energy, and environmental sectors.
Business Overview and History Amentum's roots can be traced back to the 1970s when it was originally founded as part of the AECOM organization, focusing on delivering critical environmental remediation and energy solutions to government and commercial customers. Over the decades, the company expanded its capabilities and customer footprint, growing into a diversified solutions provider supporting national security, intelligence, and space programs, in addition to its environmental and energy work.
In 2020, Amentum underwent a significant transformation when it acquired the assets and liabilities of AECOM's Energy Construction business. This acquisition expanded Amentum's technical expertise and contract portfolio, strengthening its position as a leader in the environmental remediation and energy markets. Despite some initial challenges integrating the two organizations, Amentum was able to leverage its operational excellence and customer relationships to successfully execute on this strategic acquisition.
The company's impressive scale is evident in its workforce of over 53,000 employees across more than 80 countries, with a deep bench of approximately 15,000 STEM professionals. This technical expertise, coupled with a culture of innovation and a steadfast commitment to operational excellence, has firmly positioned Amentum as a leader in its respective markets.
Amentum's diversified business model spans five core segments: Digital Solutions, Global Engineering Solutions, Intelligence & Cybersecurity, Energy & Environment, and Citizen Solutions. This breadth of capabilities allows the company to engage with its customers across multiple domains, providing tailored solutions that leverage the full breadth of its expertise.
Throughout its history, Amentum has navigated a dynamic market environment, including periods of government budget uncertainty and shifting customer priorities. The company has demonstrated resilience, leveraging its technical expertise, operational excellence, and customer relationships to weather these challenges. Amentum's commitment to ethics, safety and inclusivity has also been a core part of its culture, supporting the organization's ability to successfully execute on critical missions for its diverse customer base.
Financial Performance and Outlook Financials Amentum's fiscal year 2024 results demonstrate the strength of its business model and the successful integration of the CMS and Cyber and Intelligence units. On a pro forma basis, the company reported revenues of $13.9 billion, representing a 4% organic growth year-over-year. Adjusted EBITDA for the same period was $1.052 billion, a 7% increase compared to the prior year, driven by a 20-basis-point improvement in adjusted EBITDA margin.
For fiscal year 2024, Amentum reported revenue of $8.39 billion, net income of -$82 million, operating cash flow of $47 million, and free cash flow of $36 million. In the most recent quarter (Q1 2025), the company showed significant improvement with revenue of $3.42 billion, net income of $12 million, operating cash flow of $110 million, and free cash flow of $102 million. This represents a year-over-year revenue increase of 72.3% and a turnaround from a net loss in the prior year quarter, primarily attributable to the merger with CMS.
The company's financial performance has been underpinned by a robust backlog, which stood at $45 billion as of the end of fiscal year 2024, providing 3.2 times annual revenue coverage. Net bookings for the year totaled $12 billion, further underscoring the strong demand for Amentum's solutions across its customer base.
Amentum operates its business through two reportable segments: Digital Solutions (DS) and Global Engineering Solutions (GES). The Digital Solutions segment saw revenues of $1.29 billion for the three months ended December 27, 2024, an increase of 180% compared to the prior year period. Adjusted EBITDA for this segment was $100 million, up 163% year-over-year. The Global Engineering Solutions segment generated revenues of $2.13 billion in the first quarter of fiscal 2025, an increase of 40% compared to the prior year period, with adjusted EBITDA of $162 million, up 40% year-over-year.
Liquidity Amentum's liquidity position remains strong, with $522 million in cash and $788 million available under its $850 million revolving credit facility, with $62 million in issued letters of credit. The company's debt-to-equity ratio stands at 0.0037, while its current ratio and quick ratio are both 1.59, indicating a healthy short-term financial position.
Looking ahead, Amentum has affirmed its fiscal year 2025 guidance, projecting revenues in the range of $13.8 billion to $14.2 billion and adjusted EBITDA between $1.06 billion and $1.1 billion. The company also expects to generate free cash flow between $475 million and $525 million, supported by its capital-light business model and targeted operational efficiencies. Additionally, Amentum anticipates adjusted diluted earnings per share between $2 and $2.20 for fiscal year 2025.
The company expects quarterly sequential increases in all metrics through fiscal year 2025, primarily due to newly awarded programs ramping up and a 53rd week in the fourth quarter. Amentum is also affirming its target of achieving a net leverage ratio of approximately 3 times by the end of fiscal year 2026.
Competitive Positioning and Growth Opportunities Amentum's competitive edge is rooted in its ability to leverage the combined strengths of its legacy businesses, allowing the company to offer a comprehensive suite of advanced engineering and technology solutions. This positioning has enabled Amentum to secure several high-profile contract wins, including a $45 billion single-award IDIQ contract from the U.S. Department of Energy for the Hanford Integrated Tank Disposition Contract, and a task order to deliver microelectronics capabilities to the U.S. Navy.
The company is also well-positioned to capitalize on several key industry trends, such as the increasing demand for outsourced services and solutions from government customers, the growing global demand for clean and environmentally sustainable solutions, and the heightened focus on modernizing critical government infrastructure and capabilities.
Amentum's international footprint and strategic partnerships, particularly in regions like the UK and Australia, further bolster its ability to pursue large-scale global contracts for the U.S. and allied governments. Additionally, the company's extensive portfolio of IDIQ vehicles, totaling over $450 billion in contract ceiling, provides a strong foundation for accelerating revenue growth and enhancing margins.
The company has a diversified customer base, with approximately 80% of revenues coming from the U.S. government and 20% from international governments and commercial customers. This diversity helps mitigate risks associated with dependence on a single customer or market.
Risks and Challenges While Amentum's diversified business model and robust backlog offer stability, the company is not immune to potential risks and challenges. These include fluctuations in government spending, delays in contract awards, and the highly competitive nature of the markets in which it operates.
Additionally, the company's reliance on complex government contracts and the associated regulatory environment could pose compliance and legal risks that must be managed effectively. Amentum's ability to navigate these challenges while maintaining its operational excellence and technological edge will be critical to its long-term success.
Conclusion Amentum Holdings, Inc. (AMTM) has established itself as a formidable player in the advanced engineering and technology solutions market, leveraging its deep technical expertise, innovative capabilities, and strong customer relationships to deliver mission-critical support across a diverse range of industries. With a robust financial profile, a growing backlog, and a clear strategic vision, the company is well-positioned to capitalize on the numerous opportunities presented by global industry trends and the evolving needs of its customers.
The recent merger that formed Amentum in 2024 through the combination with Jacobs' Critical Mission Solutions and Cyber and Intelligence units has created a larger, more diversified company with over 53,000 employees globally. This transformative combination has significantly expanded Amentum's capabilities and customer reach, particularly in the digital solutions and large-scale government engineering services markets.
As Amentum continues to execute on its growth strategy, investors will closely watch the company's ability to maintain its competitive edge and drive sustainable value creation. With its strong focus on delivering advanced engineering and technology solutions to U.S. and allied government agencies, supporting critical national programs across areas like energy, environment, intelligence, space, and defense, Amentum is well-positioned to capitalize on industry mega trends and address the growing complexity of global challenges.