KBR Reports Second Quarter Fiscal 2026 Results
Rhea-AI Summary
KBR (NYSE: KBR) reported second quarter fiscal 2026 revenues of $2.0 billion, up 2% year over year, with net income attributable to KBR of $96 million, up 32%. Operating income was $172 million, down 11%, and operating margin was 8.7%. Adjusted EBITDA was $258 million, up 7%, with a 13.0% margin. Diluted EPS attributable to KBR rose 34% to $0.75, while adjusted EPS increased 9% to $0.99. Bookings and options were $1.8 billion, yielding a 1.1x book‑to‑bill; backlog and options ended the quarter at $23.0 billion.
By segment, Mission Technology Solutions revenues were $1.3 billion (down 2%) with adjusted EBITDA of $158 million (up 16%) and book‑to‑bill of 0.8x. Sustainable Technology Solutions revenues were $676 million (up 10%) with adjusted EBITDA of $123 million (down 8%) and book‑to‑bill of 1.5x, driving record $5.5 billion backlog. Liquidity totaled about $0.9 billion and net leverage was 2.3x. KBR reaffirmed its 2026 guidance, including revenues of $7.90–$8.36 billion, adjusted EBITDA of $980–$1,040 million, and adjusted EPS of $3.87–$4.22. The company continues to advance the planned spin‑off of Mission Technology Solutions, branded Trinzic, targeting completion on January 4, 2027, subject to board approval and customary conditions.
Positive
- Q2 2026 revenue $2.0B, up 2% year over year
- Q2 net income $96M, up 32%; diluted EPS up 34% to $0.75
- Q2 adjusted EBITDA $258M, up 7% with 13.0% margin
- MTS adjusted EBITDA up 16% to $158M; margin 12.1%
- STS revenue up 10% to $676M; record $5.5B backlog
- Book-to-bill 1.1x consolidated; STS 1.5x in the quarter
- 2026 guidance reaffirmed: revenue $7.90–$8.36B; adjusted EPS $3.87–$4.22
- Shareholder returns $46M in Q2 via $25M buybacks and $21M dividends
Negative
- Q2 operating income down 11% to $172M; margin 8.7%
- YTD 2026 revenue down 2% to $3.9B, driven by EUCOM runoff
- STS operating income down 18% to $103M; adjusted EBITDA down 8%
- Operating cash flow $50M in Q2, down 77% or $167M year over year
- Adjusted operating cash flow $64M in Q2, down 71% or $153M
- Net leverage increased to 2.3x TTM adjusted EBITDA from 2.2x at January 2, 2026
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 27 | Project selection | Positive | -0.3% | Selected as project management consultant for Power2X’s Rotterdam eFuels project |
| Jul 20 | Technology selection | Positive | -1.4% | Purifier ammonia technology selected for Pampa Energía’s Argentine facility |
| Jul 14 | Contract selection | Positive | -0.7% | Mission Technology Solutions selected for the ASTRA advisory contract |
| Jul 09 | Technical review | Positive | -1.2% | Completed independent review of Syntholene’s geothermal-integrated hydrogen platform |
| Jul 09 | Sustainability report | Positive | -1.2% | Released sustainability and corporate responsibility report highlighting governance metrics |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent positive KBR announcements were followed by negative 24-hour price reactions, indicating repeated divergence between announcement tone and price response.
Key Terms
book-to-bill financial
adjusted ebitda financial
non-gaap financial measures financial
idiq technical
front-end engineering design technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
Second Quarter Fiscal 2026 Results
(All comparisons against the second quarter fiscal 2025 unless noted.)
- Revenues of
$2.0 billion , up2% - Net income attributable to KBR of
$96 million , up32% ; Operating income of$172 million , down11% with an Operating income margin of8.7% - Adjusted EBITDA2 of
$258 million , up7% with an Adjusted EBITDA2 margin of13.0% - Diluted EPS attributable to KBR of
$0.75 , up34% - Adjusted EPS2 of
$0.99 , up9% - Bookings and options1 of
$1.8 billion with 1.1x book-to-bill1
Second Quarter YTD Fiscal 2026 Results
(All comparisons against the second quarter YTD fiscal 2025 unless noted.)
- Revenues of
$3.9 billion , down2% due to expected EUCOM contingency runoff - Net income attributable to KBR of
$198 million , up5% ; Operating income of$352 million , down11% with an Operating income margin of9.0% - Adjusted EBITDA2 of
$509 million , up4% with an Adjusted EBITDA2 margin of13.0% - Diluted EPS attributable to KBR of
$1.55 , up8% - Adjusted EPS2 of
$1.95 , up2% - Bookings and options1 of
$3.7 billion with 1.1x book-to-bill1
HOUSTON, July 30, 2026 (GLOBE NEWSWIRE) -- KBR, Inc. (NYSE: KBR) today announced its second quarter fiscal 2026 results.
“We delivered a strong first half while continuing to position both businesses for long-term success as we advance toward separation,” said Stuart Bradie, President and Chief Executive Officer. “Demand remains healthy across our core markets, supported by strong customer relationships, disciplined execution and growing visibility into future performance. In STS, we delivered another strong quarter of bookings, driving record backlog levels and reinforcing the durability of demand across our portfolio. In MTS, customer demand remains strong, and awarded work under protest continues to provide visibility beyond reported backlog. As we prepare for separation, we are taking actions to simplify our cost structure, improve efficiency and position both companies to compete more effectively as focused, standalone businesses. We remain confident in the opportunities ahead and our ability to create long-term value for shareholders.”
1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs. In the prior quarter, these metrics also excluded the Plaquemines LNG project.
2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, Adjusted operating cash flow, and Adjusted operating cash conversion are non-GAAP financial measures. All non-GAAP financial measures reflect results from continuing operations. See additional information at the end of this release regarding non-GAAP financial information, including reconciliations to the nearest GAAP measures
Summarized Second Quarter Fiscal 2026 Consolidated Results
| Three months ended | Six months ended | ||||||||||||||
| July 3, | July 4, | July 3, | July 4, | ||||||||||||
| Dollars in millions, except share data | 2026 | 2025 | 2026 | 2025 | |||||||||||
| Revenues | $ | 1,984 | $ | 1,952 | $ | 3,907 | $ | 3,970 | |||||||
| Operating income | 172 | 194 | 352 | 396 | |||||||||||
| Net income attributable to KBR | 96 | 73 | 198 | 189 | |||||||||||
| Net income attributable to KBR from continuing operations | 95 | 105 | 198 | 225 | |||||||||||
| Adjusted EBITDA2 | 258 | 242 | 509 | 490 | |||||||||||
| Operating income margin | 8.7 | % | 9.9 | % | 9.0 | % | 10.0 | % | |||||||
| Adjusted EBITDA2margin | 13.0 | % | 12.4 | % | 13.0 | % | 12.3 | % | |||||||
| Earnings per share: | |||||||||||||||
| Diluted earnings per share attributable to KBR | 0.75 | 0.56 | 1.55 | 1.44 | |||||||||||
| Diluted earnings per share from continuing operations | 0.74 | 0.81 | 1.55 | 1.71 | |||||||||||
| Adjusted earnings per share2 | 0.99 | 0.91 | 1.95 | 1.91 | |||||||||||
| Cash flows: | |||||||||||||||
| Operating cash flows from continuing operations | 50 | 217 | 160 | 308 | |||||||||||
| Adjusted operating cash flows2 | 64 | 217 | 183 | 308 | |||||||||||
| Return of capital to shareholders: | |||||||||||||||
| Payments to repurchase common stock | 25 | 48 | 29 | 204 | |||||||||||
| Payments of dividends to shareholders | 21 | 21 | 42 | 41 | |||||||||||
| July 3, | January 2, | ||||||||||||||
| 2026 | 2026 | ||||||||||||||
| Leverage: | |||||||||||||||
| Net debt3 | 2,258 | 2,117 | |||||||||||||
| TTM Adjusted EBITDA2 | 987 | 968 | |||||||||||||
| Net leverage | 2.3x | 2.2x | |||||||||||||
Second Quarter Fiscal 2026 Consolidated Results Review
(All comparisons against the second quarter fiscal 2025 unless noted.)
Revenues were
Operating income was
Net income attributable to KBR was
Diluted earnings per share attributable to KBR were
Adjusted EBITDA2 was
Adjusted earnings per share2 were
Backlog and options as of the quarter end totaled
Summarized Second Quarter Fiscal 2026 Segment Results
| Three months ended | Six months ended | ||||||||||||||
| July 3, | July 4, | July 3, | July 4, | ||||||||||||
| Dollars in millions | 2026 | 2025 | 2026 | 2025 | |||||||||||
| Revenues | $ | 1,984 | $ | 1,952 | $ | 3,907 | $ | 3,970 | |||||||
| Mission Technology Solutions | 1,308 | 1,336 | 2,604 | 2,717 | |||||||||||
| Sustainable Technology Solutions | 676 | 616 | 1,303 | 1,253 | |||||||||||
| Adjusted EBITDA2 | 258 | 242 | 509 | 490 | |||||||||||
| Mission Technology Solutions | 158 | 136 | 296 | 275 | |||||||||||
| Sustainable Technology Solutions | 123 | 134 | 260 | 269 | |||||||||||
| Corporate | (23 | ) | (28 | ) | (47 | ) | (54 | ) | |||||||
| Adjusted EBITDA2margin | 13.0 | % | 12.4 | % | 13.0 | % | 12.3 | % | |||||||
| Mission Technology Solutions | 12.1 | % | 10.2 | % | 11.4 | % | 10.1 | % | |||||||
| Sustainable Technology Solutions | 18.2 | % | 21.8 | % | 20.0 | % | 21.5 | % | |||||||
| July 3, | January 2, | ||||||||||||||
| 2026 | 2026 | ||||||||||||||
| Backlog | 17,805 | 16,864 | |||||||||||||
| Mission Technology Solutions | 12,282 | 12,552 | |||||||||||||
| Sustainable Technology Solutions | 5,523 | 4,312 | |||||||||||||
| Backlog and options | 22,997 | 23,211 | |||||||||||||
| Mission Technology Solutions | 17,474 | 18,899 | |||||||||||||
| Sustainable Technology Solutions | 5,523 | 4,312 | |||||||||||||
Second Quarter Fiscal 2026 Segment Results Review
(All comparisons against the second quarter fiscal 2025 unless noted.)
Mission Technology Solutions (MTS)
Revenues were
Operating income was
Adjusted EBITDA2 was
Backlog and options as of the quarter end totaled
The following new business awards were announced:
- Awarded the
$8 billion ceiling Antarctic Science and Engineering Support Contract (ASESC), a single-award IDIQ contract for the U.S. National Science Foundation, to support U.S. Antarctic Program stations and research camps over a 20-year period of performance. This award is not yet recorded in backlog or book-to-bill. - Awarded a
$95 million cost-plus-fixed-fee contract to provide Digital Engineering and Enterprise Decision Support capabilities for the U.S. Space Force at Kirtland Air Force Base over a five-year period of performance. - Awarded a position on the
$866 million ceiling Advisory Support and Technical Requirement Administration (ASTRA) multiple-award IDIQ contract to provide advisory and technical services for the U.S. Air Force, Department of War and intelligence community over five years.
Sustainable Technology Solutions (STS)
Revenues were
Operating income was
Adjusted EBITDA2 was
Backlog as of the quarter end reached a record
The following new business awards were announced:
- KBR’s Purifier® ammonia technology selected for Pampa Energía’s new ammonia-urea complex in Bahía Blanca, Argentina, which is expected to be the largest single-train ammonia plant in Latin America.
- KBR’s PureSAF® technology selected by NorSAF for a planned 100,000 ton/year SAF and e-SAF facility in Latvia, expected to be the largest sustainable aviation fuel production plant in Northern Europe.
- Selected to provide technology licensing and front-end engineering design services using KBR’s PureSAF® technology for Keppel and Aster’s proposed sustainable aviation fuel plant on Singapore’s Jurong Island.
- Selected by Power2X to provide project management consultancy services for its Rotterdam eFuels project, one of Europe's largest sustainable aviation fuel initiatives, expected to produce more than 250,000 tons of e-SAF annually.
Balance Sheet, Cash Flow, and Capital Deployment
Liquidity as of July 3, 2026, totaled approximately
Operating cash flows from continuing operations for the quarter were
During the second quarter, KBR returned
Reaffirming Fiscal 2026 Guidance
KBR reaffirms the following full‑year fiscal 2026 outlook for the consolidated company and plans to update standalone outlooks in connection with the planned spin transaction.
| Fiscal Year 2026 Guidance | |
| Revenues | |
| Adjusted EBITDA | |
| Adjusted EPS | |
| Adjusted operating cash flows | |
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.
Planned Spin-Off of 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. We continue to believe that the formation of two independent companies with distinct business profiles will better position both companies to deliver long-term profitable growth and value for customers, employees, and shareholders. Upon completion, KBR and its shareholders are expected to benefit from ownership in two pure‑play public companies with enhanced strategic and management focus, prioritized commercial resources, operational independence, and financial flexibility to support strategic imperatives.
KBR continues to advance key separation workstreams, including leadership, governance, operating model and branding activities for the future Mission Technology Solutions company. On June 25, 2026, KBR announced the appointments of Michael LaRouche as President and Chief Executive Officer-designate and Nicholas Veasey as Executive Vice President and Chief Financial Officer-designate of the planned spin-off entity. On July 30, 2026, KBR unveiled Trinzic as the future standalone company, introducing its new corporate brand and identity as it prepares to become an independent public company.
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 on January 4, 2027, which is the first business day of fiscal 2027, subject to final approval by KBR’s Board of Directors and other customary conditions. Additional details regarding the spin-off transaction are available on the Investor Relations section of KBR's website at investors.kbr.com/news-and-events/spin-off-information.
Conference Call Details
The company will host a conference call to discuss its second quarter fiscal 2026 results on Thursday, July 30, 2026, at 7:30 a.m. Central Time. The conference call will be webcast simultaneously through the Investor Relations section of KBR’s website at investors.kbr.com. A replay of the webcast will be available shortly after the call on KBR’s website via the webcast link here: https://events.q4inc.com/attendee/815377675.
About KBR
We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 37,000 people worldwide with customers in more than 85 countries and operations in over 28 countries. KBR is proud to work with its customers across the globe to provide technology, value-added services, and long-term operations and maintenance services to ensure consistent delivery with predictable results. At KBR, We Deliver.
Visit www.kbr.com
1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs. In the prior quarter, these metrics also excluded the Plaquemines LNG project.
2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, Adjusted operating cash flows, and Adjusted operating cash conversion are non-GAAP financial measures. All non-GAAP financial measures reflect results from continuing operations. See additional information at the end of this release regarding non-GAAP financial information, including reconciliations to the nearest GAAP measures. Trailing-twelve months (TTM) Adjusted EBITDA.
3 Net debt refers to total gross debt before unamortized debt issuance costs and discounts, less cash and cash equivalents.
Forward-Looking Statements
The statements in this press release that are not historical statements, including statements regarding our expectations for our future financial performance, effective tax rate, operating cash flows, contract revenues, award activity and backlog, program activity, our business strategy, business opportunities, interest expense, our plans for raising and deploying capital and paying dividends, and our planned spin-off of the Mission Technology Solutions business, including the anticipated timing, benefits and tax treatment of the spin-off transaction, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company’s control that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: uncertainty, delays or reductions in government funding, appropriations and payments, including as a result of continuing resolution funding mechanisms, government shutdowns or changing budget priorities; developments and changes in government laws, regulations and regulatory requirements and policies that may require us to pause, delay or abandon new and existing projects; changes in the priorities, focus, authority and budgets of government agencies under the current administration that may impact our existing projects and/or our ability to win new contracts; the ongoing conflict between Russia and Ukraine and global volatility and continued unrest, including in the Middle East, and the related impacts on our business; potential adverse economic and market conditions, such as interest rate and currency exchange rate fluctuations, or ongoing uncertainty related to impacts of newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or other changes in trade policy, including impact tariffs could have on customer spend; the company’s ability to manage its liquidity; delays, cancellations or reversals of contract awards due to bid protests or legal challenges; the potential adverse outcome of and the publicity surrounding audits and investigations by domestic and foreign government agencies and legislative bodies; changes in capital spending by the company’s customers; the company’s ability to obtain contracts from existing and new customers and perform under those contracts; structural changes in the industries in which the company operates; escalating costs associated with and the performance of fixed-fee projects and the company’s ability to control its cost under its contracts; claims negotiations and contract disputes with the company’s customers; changes in the demand for or price of oil and/or natural gas; protection of intellectual property rights; compliance with environmental laws; compliance with laws related to income taxes; unsettled political conditions, war and the effects of terrorism; foreign operations and foreign exchange rates and controls; the development and installation of financial systems; the possibility of cyber and malware attacks; increased competition for employees; the ability to successfully complete and integrate acquisitions; the company's proposed spin-off; investment decisions by project owners; and operations of joint ventures, including joint ventures that are not controlled by the company.
The company's most recently filed Annual Report on Form 10-K, any subsequent Form 10-Qs and 8-Ks, and other U.S. Securities and Exchange Commission (SEC) filings discuss some of the important risk factors that the company has identified that may affect its business, results of operations and financial condition. Except as required by law, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
For further information, please contact:
| Investor Relations: Rachael Goldwait Vice President, Investor Relations 713-753-4634 Investors@kbr.com | Media Relations: Philip Ivy Vice President, Global Communications 713-753-3800 Mediarelations@kbr.com |
| KBR, Inc. Condensed Consolidated Statements of Operations (In millions, except for per share data) (Unaudited) | |||||||||||||||
| Three months ended | Six months ended | ||||||||||||||
| July 3, | July 4, | July 3, | July 4, | ||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenues: | |||||||||||||||
| Mission Technology Solutions | $ | 1,308 | $ | 1,336 | $ | 2,604 | $ | 2,717 | |||||||
| Sustainable Technology Solutions | 676 | 616 | 1,303 | 1,253 | |||||||||||
| Total revenues | 1,984 | 1,952 | 3,907 | 3,970 | |||||||||||
| Gross profit | 293 | 290 | 558 | 590 | |||||||||||
| Equity in earnings of unconsolidated affiliates | 52 | 51 | 103 | 93 | |||||||||||
| Selling, general and administrative expenses | (143 | ) | (146 | ) | (262 | ) | (286 | ) | |||||||
| Spin-off costs and other charges | (31 | ) | — | (46 | ) | — | |||||||||
| Other operating income (expense) | 1 | (1 | ) | (1 | ) | (1 | ) | ||||||||
| Operating income (loss): | |||||||||||||||
| Mission Technology Solutions | 116 | 108 | 227 | 221 | |||||||||||
| Sustainable Technology Solutions | 103 | 125 | 216 | 252 | |||||||||||
| Corporate | (47 | ) | (39 | ) | (91 | ) | (77 | ) | |||||||
| Total operating income | 172 | 194 | 352 | 396 | |||||||||||
| Interest expense | (35 | ) | (41 | ) | (72 | ) | (82 | ) | |||||||
| Other non-operating expense | (2 | ) | (8 | ) | (2 | ) | (5 | ) | |||||||
| Income from continuing operations before income taxes | 135 | 145 | 278 | 309 | |||||||||||
| Provision for income taxes | (38 | ) | (39 | ) | (78 | ) | (82 | ) | |||||||
| Net income from continuing operations | 97 | 106 | 200 | 227 | |||||||||||
| Net income (loss) from discontinued operations, net of tax | 2 | (48 | ) | — | (54 | ) | |||||||||
| Net income | 99 | 58 | 200 | 173 | |||||||||||
| Less: Net income attributable to noncontrolling interests included in continuing operations | 2 | 1 | 2 | 2 | |||||||||||
| Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations | 1 | (16 | ) | — | (18 | ) | |||||||||
| Net income attributable to KBR | 96 | 73 | 198 | 189 | |||||||||||
| Adjusted EBITDA¹ | $ | 258 | $ | 242 | $ | 509 | $ | 490 | |||||||
| Diluted earnings per share from continuing operations | $ | 0.74 | $ | 0.81 | $ | 1.55 | $ | 1.71 | |||||||
| Diluted earnings (loss) per share from discontinued operations | $ | 0.01 | $ | (0.25 | ) | $ | — | $ | (0.27 | ) | |||||
| Diluted earnings per share attributable to KBR | $ | 0.75 | $ | 0.56 | $ | 1.55 | $ | 1.44 | |||||||
| Adjusted EPS¹ | $ | 0.99 | $ | 0.91 | $ | 1.95 | $ | 1.91 | |||||||
| Diluted weighted average common shares outstanding | 127 | 129 | 127 | 131 | |||||||||||
| Adjusted weighted average common shares outstanding | 127 | 129 | 127 | 131 | |||||||||||
1 See additional information at the end of this release regarding non-GAAP financial information, including a reconciliation to the nearest GAAP measure
| KBR, Inc. Condensed Consolidated Balance Sheets (In millions, except share data) | |||||||
| July 3, 2026 | January 2, 2026 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 312 | $ | 500 | |||
| Accounts receivable, net of allowance for credit losses of | 1,109 | 1,086 | |||||
| Contract assets | 360 | 280 | |||||
| Other current assets | 182 | 166 | |||||
| Current assets of discontinued operations | 15 | 19 | |||||
| Total current assets | 1,978 | 2,051 | |||||
| Pension assets | 113 | 89 | |||||
| Property, plant and equipment, net of accumulated depreciation of | 227 | 232 | |||||
| Operating lease right-of-use assets | 224 | 217 | |||||
| Goodwill | 2,668 | 2,677 | |||||
| Intangible assets, net of accumulated amortization of | 694 | 727 | |||||
| Equity in and advances to unconsolidated affiliates | 241 | 107 | |||||
| Deferred income taxes | 124 | 162 | |||||
| Other assets (including | 398 | 322 | |||||
| Total assets | $ | 6,667 | $ | 6,584 | |||
| Liabilities and Shareholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 749 | $ | 712 | |||
| Contract liabilities | 360 | 331 | |||||
| Accrued salaries, wages and benefits | 313 | 342 | |||||
| Current maturities of long-term debt | 49 | 49 | |||||
| Other current liabilities | 236 | 235 | |||||
| Current liabilities of discontinued operations | 16 | 19 | |||||
| Total current liabilities | 1,723 | 1,688 | |||||
| Employee compensation and benefits | 149 | 144 | |||||
| Income tax payable | 97 | 83 | |||||
| Deferred income taxes | 87 | 95 | |||||
| Long-term debt | 2,503 | 2,547 | |||||
| Operating lease liabilities | 246 | 236 | |||||
| Other liabilities | 220 | 279 | |||||
| Total liabilities | 5,025 | 5,072 | |||||
| Commitments and Contingencies | |||||||
| KBR shareholders' equity: | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | — | — | |||||
| Paid-in capital in excess of par | 2,566 | 2,552 | |||||
| Retained earnings | 1,853 | 1,697 | |||||
| Treasury stock, 57,086,972 shares and 56,437,139 shares, at cost, respectively | (1,842 | ) | (1,818 | ) | |||
| Accumulated other comprehensive loss | (941 | ) | (928 | ) | |||
| Total KBR shareholders' equity | 1,636 | 1,503 | |||||
| Noncontrolling interests | 6 | 9 | |||||
| Total shareholders' equity | 1,642 | 1,512 | |||||
| Total liabilities and shareholders' equity | $ | 6,667 | $ | 6,584 | |||
| KBR, Inc. Condensed Consolidated Statements of Cash Flows (In millions) (Unaudited) | |||||||
| Six months ended | |||||||
| July 3, 2026 | July 4, 2025 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 200 | $ | 173 | |||
| Net loss from discontinued operations, net of tax | — | 54 | |||||
| Net income from continuing operations | 200 | 227 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 83 | 86 | |||||
| Equity in earnings of unconsolidated affiliates | (103 | ) | (93 | ) | |||
| Deferred income tax | 31 | 26 | |||||
| Other charges associated with lease right-of-use asset impairment | 17 | — | |||||
| Other | (2 | ) | 4 | ||||
| Changes in operating assets and liabilities, net of acquired business: | |||||||
| Accounts receivable, net of allowance for credit losses | (26 | ) | (128 | ) | |||
| Contract assets | (80 | ) | (6 | ) | |||
| Accounts payable | 40 | 25 | |||||
| Contract liabilities | 31 | (2 | ) | ||||
| Accrued salaries, wages and benefits | (21 | ) | (9 | ) | |||
| Payments on operating lease liabilities | (40 | ) | (41 | ) | |||
| Payments from unconsolidated affiliates, net | 5 | 5 | |||||
| Distributions of earnings from unconsolidated affiliates | 97 | 124 | |||||
| Other assets and liabilities | (72 | ) | 90 | ||||
| Total cash flows provided by operating activities - continuing operations | $ | 160 | $ | 308 | |||
| Cash flows from investing activities: | |||||||
| Purchases of property, plant and equipment | $ | (28 | ) | $ | (16 | ) | |
| Return of (investment in) equity method investments, net | (128 | ) | 3 | ||||
| Acquisition of business, net of cash acquired | — | (11 | ) | ||||
| Purchases of available-for-sale debt securities | (49 | ) | — | ||||
| Purchases of other investments | (13 | ) | — | ||||
| Other | 2 | — | |||||
| Total cash flows used in investing activities - continuing operations | (216 | ) | (24 | ) | |||
| Cash flows from financing activities: | |||||||
| Borrowings on Revolver | 141 | 373 | |||||
| Payments on short-term and long-term debt | (25 | ) | (18 | ) | |||
| Payments on Revolver | (161 | ) | (323 | ) | |||
| Payments to repurchase common stock | (29 | ) | (204 | ) | |||
| Payments of dividends to shareholders | (42 | ) | (41 | ) | |||
| Other | (12 | ) | (6 | ) | |||
| Total cash flows used in financing activities - continuing operations | $ | (128 | ) | $ | (219 | ) | |
| Total operating cash flows from discontinued operations | (2 | ) | (27 | ) | |||
| Total investing cash flows from discontinued operations | — | (12 | ) | ||||
| Total financing cash flows from discontinued operations | — | 8 | |||||
| Total cash flows from discontinued operations | $ | (2 | ) | $ | (31 | ) | |
| Effect of exchange rate changes on cash | (4 | ) | 20 | ||||
| Increase (decrease) in cash and cash equivalents | (190 | ) | 54 | ||||
| Cash and cash equivalents at beginning of period | 505 | 350 | |||||
| Cash and cash equivalents at end of period | $ | 315 | $ | 404 | |||
| Less: cash and cash equivalents at end of period for discontinued operations | 3 | 1 | |||||
| Cash and cash equivalents at end of period for continuing operations | $ | 312 | $ | 403 | |||
| Supplemental disclosure of cash flows information: | |||||||
| Noncash financing activities | |||||||
| Dividends declared | $ | 21 | $ | 21 | |||
Unaudited Non-GAAP Financial Information
The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.
Adjusted EBITDA
We evaluate performance based on Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA is defined as Net income (loss) attributable to KBR, plus Net (income) loss from discontinued operations, net of tax; less Net income (loss) attributable to noncontrolling interest included in discontinued operations; less Interest expense; Other non-operating expense (income); Provision for income taxes; Depreciation and amortization (D&A); and certain discrete items as identified by Management to be non-recurring in nature as set forth below. Adjusted EBITDA can also be defined as Operating income less Net income attributable to noncontrolling interests from continuing operations; plus D&A; and certain discrete items as identified by Management to be non-recurring in nature as set forth below. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenues. Adjusted EBITDA and Adjusted EBITDA margin for each of the three- and six-month periods ended July 3, 2026 and July 4, 2025 are considered non-GAAP financial measures under SEC rules because Adjusted EBITDA excludes certain amounts included in the calculation of Net income (loss) attributable to KBR in accordance with GAAP for such periods. Management believes Adjusted EBITDA and Adjusted EBITDA margin afford investors a view of what management considers KBR's core performance for each of the three- and six-month periods ended July 3, 2026 and July 4, 2025 and also affords investors the ability to make a more informed assessment of such core performance for the comparable periods.
| Three months ended | Six months ended | |||||||||||||
| July 3, | July 4, | July 3, | July 4, | |||||||||||
| Dollars in millions | 2026 | 2025 | 2026 | 2025 | ||||||||||
| Net income attributable to KBR | $ | 96 | $ | 73 | $ | 198 | $ | 189 | ||||||
| Net (income) loss from discontinued operations, net of tax | (2 | ) | 48 | — | 54 | |||||||||
| Net income (loss) attributable to noncontrolling interest included in discontinued operations | 1 | (16 | ) | — | (18 | ) | ||||||||
| Net income attributable to KBR from continuing operations | $ | 95 | $ | 105 | $ | 198 | $ | 225 | ||||||
| • Interest expense | 35 | 41 | 72 | 82 | ||||||||||
| • Other non-operating expense | 2 | 8 | 2 | 5 | ||||||||||
| • Provision for income taxes | 38 | 39 | 78 | 82 | ||||||||||
| • Depreciation and amortization | 42 | 45 | 83 | 86 | ||||||||||
| • Spin-off, acquisition and restructuring | 33 | 4 | 49 | 10 | ||||||||||
| • Share of JV interest, tax, D&A and acquisition costs(1) | 13 | — | 27 | — | ||||||||||
| Adjusted EBITDA | $ | 258 | $ | 242 | $ | 509 | $ | 490 | ||||||
| Three months ended | Six months ended | ||||||||||||||
| July 3, | July 4, | July 3, | July 4, | ||||||||||||
| Dollars in millions | 2026 | 2025 | 2026 | 2025 | |||||||||||
| Operating income - MTS | $ | 116 | $ | 108 | $ | 227 | $ | 221 | |||||||
| • Net loss attributable to noncontrolling interests included in continuing operations | — | 1 | — | 1 | |||||||||||
| • Depreciation and amortization | 24 | 27 | 49 | 53 | |||||||||||
| • Spin-off, acquisition and restructuring | 15 | — | 16 | — | |||||||||||
| • Share of JV interest, tax, D&A and acquisition costs(1) | 3 | — | 4 | — | |||||||||||
| Adjusted EBITDA - MTS | $ | 158 | $ | 136 | $ | 296 | $ | 275 | |||||||
| Operating income - STS | $ | 103 | $ | 125 | $ | 216 | $ | 252 | |||||||
| • Net income attributable to noncontrolling interests included in continuing operations | (2 | ) | (2 | ) | (2 | ) | (3 | ) | |||||||
| • Depreciation and amortization | 11 | 11 | 21 | 20 | |||||||||||
| • Spin-off, acquisition and restructuring | 1 | — | 2 | — | |||||||||||
| • Share of JV interest, tax, D&A and acquisition costs(1) | 10 | — | 23 | — | |||||||||||
| Adjusted EBITDA - STS | $ | 123 | $ | 134 | $ | 260 | $ | 269 | |||||||
| Operating loss - Corporate | $ | (47 | ) | $ | (39 | ) | $ | (91 | ) | $ | (77 | ) | |||
| • Depreciation and amortization | 7 | 7 | 13 | 13 | |||||||||||
| • Spin-off, acquisition and restructuring | 17 | 4 | 31 | 10 | |||||||||||
| Adjusted EBITDA - Corporate | $ | (23 | ) | $ | (28 | ) | $ | (47 | ) | $ | (54 | ) | |||
| Operating income - KBR | $ | 172 | $ | 194 | $ | 352 | $ | 396 | |||||||
| • Net income attributable to noncontrolling interests included in continuing operations | (2 | ) | (1 | ) | (2 | ) | (2 | ) | |||||||
| • Depreciation and amortization | 42 | 45 | 83 | 86 | |||||||||||
| • Spin-off, acquisition and restructuring | 33 | 4 | 49 | 10 | |||||||||||
| • Share of JV interest, tax, D&A and acquisition costs(1) | 13 | — | 27 | — | |||||||||||
| Adjusted EBITDA - KBR | $ | 258 | $ | 242 | $ | 509 | $ | 490 | |||||||
(1) Beginning with the three months ended April 3, 2026, Adjusted EBITDA was revised to include add-backs associated with KBR's share of unconsolidated JV interest, taxes, depreciation, amortization and acquisition costs on a prospective basis. Management concluded that retrospective application would not provide additional meaningful information to investors and therefore did not recast historical non‑GAAP results. The estimated impact to fiscal 2025 margins was approximately 20 basis points.
Adjusted EPS
Adjusted earnings per share (Adjusted EPS) for each of the three- and six-month periods ended July 3, 2026 and July 4, 2025 is considered a non-GAAP financial measure under SEC rules because Adjusted EPS excludes certain amounts included in the Diluted EPS calculated in accordance with GAAP for such periods. The most directly comparable financial measure calculated in accordance with GAAP is Diluted EPS for the same periods. Management believes that Adjusted EPS affords investors a view of what management considers KBR's core earnings performance for each of the three- and six-month periods ended July 3, 2026 and July 4, 2025 and also affords investors the ability to make a more informed assessment of such core earnings performance for the comparable periods.
| Three months ended | Six months ended | ||||||||||||
| July 3, | July 4, | July 3, | July 4, | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||
| Diluted EPS attributable to KBR | $ | 0.75 | $ | 0.56 | $ | 1.55 | $ | 1.44 | |||||
| Less: Diluted earnings (loss) per share from discontinued operations | 0.01 | (0.25 | ) | — | (0.27 | ) | |||||||
| Diluted EPS from continuing operations | $ | 0.74 | $ | 0.81 | $ | 1.55 | $ | 1.71 | |||||
| • Amortization related to acquisitions | 0.06 | 0.07 | 0.12 | 0.14 | |||||||||
| • Spin-off, acquisition and restructuring | 0.19 | 0.03 | 0.28 | 0.06 | |||||||||
| Adjusted EPS | $ | 0.99 | $ | 0.91 | $ | 1.95 | $ | 1.91 | |||||
| Diluted weighted average common shares outstanding | 127 | 129 | 127 | 131 | |||||||||
| Adjusted weighted average common shares outstanding | 127 | 129 | 127 | 131 | |||||||||
Adjusted Operating Cash Flows and Adjusted Operating Cash Conversion
Adjusted operating cash flows and Adjusted operating cash conversion are considered non-GAAP financial measures under SEC rules. Adjusted operating cash flows exclude certain amounts included in the cash flows provided by operating activities calculated in accordance with GAAP. Adjusted operating cash conversion is calculated as Adjusted operating cash flows divided by Adjusted weighted average common shares outstanding, which is then divided by Adjusted earnings per share. Management believes that Adjusted operating cash flows and adjusted operating cash conversion afford investors a view of what management considers KBR's core operating cash flow performance for each of the three- and six-month periods ended July 3, 2026 and July 4, 2025 and also afford investors the ability to make a more informed assessment of such core operating cash generation performance.
| Three months ended | Six months ended | ||||||||||||||
| July 3, | July 4, | July 3, | July 4, | ||||||||||||
| Dollars in millions, except per share amounts | 2026 | 2025 | 2026 | 2025 | |||||||||||
| Operating cash flows from continuing operations | $ | 50 | $ | 217 | $ | 160 | $ | 308 | |||||||
| Adjust: Spin-off transaction costs | 14 | — | 23 | — | |||||||||||
| Adjusted operating cash flows | $ | 64 | $ | 217 | $ | 183 | $ | 308 | |||||||
| Adjusted operating cash flow per adjusted share | 0.50 | 1.68 | 1.44 | 2.35 | |||||||||||
| Adjusted earnings per share | 0.99 | 0.91 | 1.95 | 1.91 | |||||||||||
| Adjusted operating cash conversion | 51 | % | 185 | % | 74 | % | 123 | % | |||||||
