Amentum Holdings, Inc. secured a $120 million contract with the Defense Information Systems Agency (DISA) to provide Z‑series chipset Processor Capacity Services (PCS). The award, announced on December 9, 2025, gives Amentum a five‑year base period with five one‑year options for on‑demand, dynamically scalable computing power that includes provisioning, maintenance, licensing, and operational support.
The PCS contract is a high‑margin, recurring revenue opportunity that fits squarely into Amentum’s strategy of delivering end‑to‑end hardware lifecycle services to government customers. By leveraging DISA’s use of Z‑series mainframe chips, Amentum can offer a utility‑style computing model that allows the agency to pay only for the capacity it consumes, a model that has proven attractive to federal agencies seeking flexibility and cost efficiency.
Management highlighted the strategic fit of the award. President of Amentum’s Engineering & Technology Group, Mark Walter, said the company’s “proven ability to manage an entire hardware lifecycle expertly suits DISA’s processing needs” and that the solution routinely exceeds 99.999% availability. Senior Vice President of Digital Transformation, Travis Mackland, noted that the on‑demand approach “provides maximum flexibility, value, and mission effectiveness,” allowing DISA to scale power usage up or down as operational demands change.
Financially, the contract adds a predictable revenue stream that is expected to strengthen Amentum’s operating margin over the long term. While the company’s current operating margin sits at 2.9% and net margin at 0.46%, the recurring nature of PCS contracts is projected to lift margin profiles as scale and operational leverage improve. The contract also positions Amentum to capture additional government IT modernization work, as evidenced by recent industry trends such as HPE’s $931 million DISA data‑center modernization award.
The award underscores Amentum’s growing presence in the defense technology sector and signals confidence from DISA in the company’s delivery capabilities. It also reflects a broader shift in federal IT procurement toward utility‑style computing services, which could open further opportunities for Amentum to expand its PCS portfolio across other agencies.
Amentum’s Altman Z‑Score, currently in the grey area, and its modest margins highlight the importance of securing high‑value, recurring contracts to improve financial resilience. The DISA award is a key step toward that goal, providing both revenue growth and margin expansion potential as the company scales its services.
The contract’s strategic alignment, recurring revenue model, and potential margin impact make it a material event that could influence long‑term investment theses for stakeholders focused on government services and technology infrastructure.
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