AMTM earnings analysis
What we found in AMTM's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Amentum posted mixed Q3 results: revenue declined 2.0% year over year to $3.490 billion, but operating income rose 67.0% to $172 million and operating margin expanded to approximately 4.9%. Digital Solutions grew revenue 3%, while Global Engineering Solutions revenue declined 5% but delivered 9% Adjusted EBITDA growth. Backlog increased to $48.237 billion and debt reduction lowered interest expense, although nine-month operating cash flow declined to $235 million and the company remains highly exposed to federal government funding and variable-rate debt.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Operating income and margin expanded
- Q3 operating income increased to $172 million from $103 million, a $69 million or 67.0% year-over-year increase. Operating margin expanded to approximately 4.9% from 2.9% in the prior-year quarter.
- Net income improved sharply
- Net income attributable to common shareholders rose to $66 million from $10 million, an increase of $56 million or 560.0% year over year. The effective tax rate also declined to 29.8% from 108.3%.
- Digital Solutions delivered growth
- Digital Solutions revenue increased 3% year over year to $1,457 million, while Adjusted EBITDA increased 2% to $116 million. Growth was driven by new contract awards and expansion of existing programs.
- GES expanded EBITDA despite lower sales
- Global Engineering Solutions Adjusted EBITDA increased 9% to $174 million despite a 5% revenue decline to $2,033 million, reflecting strong operational performance.
- Backlog reached $48.2 billion
- Total backlog increased to $48.237 billion from $44.642 billion, a $3.6 billion increase, primarily due to new contract wins. Funded backlog was $6.240 billion.
- Debt reduction lowered interest expense
- The company made a $125 million voluntary principal payment on Term Loan B on June 30, 2026. Interest expense and other, net declined to $62 million from $88 million in the prior-year quarter.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Revenue remains under pressure
- Q3 revenue declined 2.0% to $3,490 million from $3,561 million, primarily due to contracts transitioning from consolidated operations to unconsolidated joint ventures and fiscal 2025 divestitures. GES revenue fell 5% year over year to $2,033 million.
- Working-capital use reduced cash flow
- The company reported $235 million of operating cash flow for the first nine months, down $38 million from $273 million a year earlier. Management attributed the decline to a $167 million change in operating assets and liabilities, despite a $129 million increase in cash earnings.
- High exposure to federal budgets
- Approximately 81% of fiscal 2025 revenue came from U.S. federal government contracts. Management also noted government shutdowns from October 2 to November 12, 2025 and January 31 to February 3, 2026, with the DHS shutdown continuing until April 30, 2026; future continuing resolutions or delayed appropriations could delay awards and program starts.
- Floating-rate debt remains sensitive
- Variable-rate Term Loan A, Term Loan B, and Revolver debt remains exposed to interest-rate movements. A 1% change in applicable rates would have changed nine-month interest expense by approximately $23 million, while the company had $1.3 billion of interest-rate swaps outstanding.
- Refinancing generated debt charges
- The company recognized a $16 million loss on extinguishment of debt in the nine months ended July 3, 2026, related to the Credit Facility amendment and the $125 million Term Loan B prepayment.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 10.3%
- Operating margin
- 4.9%
- Segment
- Digital Solutions: Q3 revenue $1,457 million, up $36 million or 3% year over year; Adjusted EBITDA $116 million, up $2 million or 2%. Nine-month revenue was $4,262 million, up 5%, and Adjusted EBITDA was $324 million, up 1%.
- Segment
- Global Engineering Solutions: Q3 revenue $2,033 million, down $107 million or 5% year over year; Adjusted EBITDA $174 million, up $14 million or 9%. Nine-month revenue was $5,943 million, down 7%, and Adjusted EBITDA was $504 million, up 4%.
What they said about what is next.
The 10-Q does not provide explicit quantitative revenue or EPS guidance. The filing discusses constructive federal budget trends and expects internally generated funds, available borrowings, and cash on hand to provide liquidity for at least the next twelve months.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 12, 2026
- Amentum reported Q2 fiscal 2026 revenue of $3.478 billion, slightly down 0.4% year-over-year. Adjusted EPS rose to $0.60, outperforming analyst expectations, reflecting strong operational performance despite a decline…
- 10-Q · May 7, 2025
- Amentum reported Q2 revenue of $3,491 million and diluted EPS of $0.02, beating consensus while reflecting acquisition-related amortization and restructuring of reporting segments. Digital Solutions revenue was $1,340…
- 10-K · December 17, 2024
- Amentum became a public company through a merger/spin on September 27, 2024 and presents a large, diversified government services platform with a $45.0 billion backlog as of September 27, 2024 and a ~53,000-employee…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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