KBR announced a $117 million cost‑plus‑fixed‑fee follow‑on contract to provide Foreign Military Sales (FMS) support for the U.S. Navy’s F/A‑18 and EA‑18G programs. The five‑year agreement covers implementation, engineering, logistics, and lifecycle support for partner nations Australia, Finland and Switzerland, ensuring their aircraft remain mission‑ready.
The award is a key milestone in KBR’s Mission Technology Solutions strategy, which the company plans to spin off into a separate public entity later in 2026. By adding a recurring revenue stream tied to a high‑profile platform, the contract strengthens the MTS segment’s financial profile and positions KBR to capture additional FMS work as allied air forces modernize their fleets.
KBR’s Q3 2025 results showed revenue of $1.9 billion and adjusted EBITDA of $240 million, a 12.4% margin. The company’s book‑to‑bill ratio of 1.4x reflected a healthy order backlog. The new FMS contract is expected to contribute a steady portion of that revenue stream over the next five years, reinforcing the company’s ability to convert its backlog into cash flow and supporting the projected growth of the MTS segment.
Mark Kavanaugh, KBR’s President of Defense, Intel and Space, said the company’s “long‑standing expertise on the F/A‑18 platform and our trusted partnership with NAVAIR’s PMA‑265 program” underpin the award. He added that the contract “demonstrates KBR’s capability to deliver integrated defense solutions to allied governments and reinforces our commitment to the MTS business.”
Analysts have focused on the planned spin‑off of the MTS segment as the primary driver of recent market interest. Oppenheimer’s initiation of coverage with an “Outperform” rating and a $60 price target highlighted the value‑creation potential of separating the defense‑services business. While the FMS contract is a positive addition, it is the broader strategic restructuring that is shaping investor sentiment.
The contract provides a long‑term, recurring revenue stream that will help KBR meet its growth targets for the MTS segment. It also signals to allied governments that KBR remains a trusted partner for complex, lifecycle‑support programs. The deal’s impact on KBR’s overall financials will be incremental, but it strengthens the company’s competitive position in the defense‑services market and supports the strategic narrative that the MTS spin‑off will unlock shareholder value.
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