KBR (NYSE: KBR) grows 2025 earnings, lifts margins and issues 2026 outlook

Rhea-AI Filing Summary

KBR, Inc. reported solid fiscal 2025 earnings with modest top-line growth. Full-year revenues were $7.8 billion, up 1%, while net income attributable to KBR rose 11% to $415 million. Diluted EPS increased 15% to $3.21 and Adjusted EPS climbed 18% to $3.93.

Adjusted EBITDA reached $968 million, up 12%, with margin improving to 12.4% from 11.3%. Backlog and options ended the year at $23.2 billion, up 13%, supported by strong awards in both Mission Technology Solutions and Sustainable Technology Solutions.

In the fourth quarter, revenue declined 11% to $1.9 billion, but diluted EPS grew 53% to $0.87 and Adjusted EPS rose 10% to $0.99, reflecting better margins and lower interest expense. Net leverage improved to 2.2x, and operating cash flow from continuing operations was $557 million.

For fiscal 2026, KBR guides to revenues of $7.90–$8.36 billion and Adjusted EPS of $3.87–$4.22, implying low‑single‑digit to mid‑single‑digit growth. The company is advancing its planned tax‑free spin‑off of the Mission Technology Solutions segment, targeting completion in the second half of 2026.

Positive

• Strong earnings and margin expansion: Fiscal 2025 Adjusted EBITDA increased to $968 million (up 12%) with margin rising to 12.4%, while Adjusted EPS grew 18% to $3.93, indicating improved profitability.
• Healthy backlog and deleveraging: Backlog and options reached $23.2 billion (up 13%), operating cash flows from continuing operations were $557 million, and net leverage improved to 2.2x, supporting balance sheet strength.
• Constructive 2026 guidance and portfolio move: 2026 guidance targets revenue of $7.90–$8.36 billion and Adjusted EPS of $3.87–$4.22, and the planned tax-free spin-off of Mission Technology Solutions is targeted for the second half of 2026.

Negative

• Top-line pressure in key quarter and segment: Fourth-quarter revenues fell 11% to $1.9 billion and Mission Technology Solutions revenues declined 14% due to scope reductions, funding constraints, and award delays, with a quarterly book-to-bill of 0.5x in that segment.

Insights

Equity analyst

KBR delivered margin-driven earnings growth, strong cash flow, and modestly positive 2026 guidance.

KBR turned flat revenue into double-digit profit growth in 2025. Adjusted EBITDA rose to $968M and margin expanded to 12.4%, helped by higher equity earnings, lower SG&A, and resolution of legacy contract issues.

Cash generation was robust, with operating cash flows from continuing operations of $557M and net leverage improving to 2.2x. Backlog and options increased 13% to $23.2B, indicating healthy multi-year visibility despite near-term award delays in parts of the U.S. government market.

Management’s 2026 outlook targets revenue of $7.90B–$8.36B and Adjusted EPS of $3.87–$4.22, implying continued but moderate growth. Progress on the planned spin-off of the Mission Technology Solutions segment, expected in the second half of 2026, could reshape the portfolio and financial profile once finalized.

0001357615false00013576152026-02-262026-02-26

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 26, 2026

KBR, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-33146

20-4536774

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

601 Jefferson Street

Suite 3400

Houston,

Texas

77002

(Address of principal executive offices)

Registrant's telephone number including area code: (713) 753-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading symbol			Name of each exchange on which listed
Common Stock, $0.001 par value			KBR			New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On February 26, 2026, KBR, Inc. issued a press release titled, “KBR Reports Fourth Quarter and Fiscal 2025 Results.” The full text of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1						KBR, Inc. press release dated February 26, 2026, titled, “KBR Reports Fourth Quarter and Fiscal 2025 Results.”
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

						KBR, INC.
February 26, 2026						/s/ Sonia Galindo
						Sonia Galindo
						Executive Vice President, General Counsel & Corporate Secretary

Exhibit 99.1

KBR Reports Fourth Quarter and Fiscal 2025 Results

Fourth Quarter Fiscal 2025 Results

(All comparisons versus prior year period unless noted.)

•Revenues of $1.9 billion, down 11%, due to the slower pace of awards and contingency EUCOM scope reductions

•Net income attributable to KBR of $111 million, up 46%; Operating income of $191 million, up 36% with an Operating income margin of 10.1%; Adjusted EBITDA2 of $238 million, up 5% with an Adjusted EBITDA2 margin of 12.6%

•Diluted EPS of $0.87, up 53%; Adjusted EPS2 of $0.99, up 10%

•Bookings and options1 of $2.0 billion with 0.9x book-to-bill1

Fiscal 2025 Results

(All comparisons versus prior year period unless noted.)

•Revenues of $7.8 billion, up 1%

•Net income attributable to KBR of $415 million, up 11%; Operating income of $778 million, up 18% with an Operating income margin of 10.0%; Adjusted EBITDA2 of $968 million, up 12% with an Adjusted EBITDA2 margin of 12.4%

•Diluted EPS of $3.21, up 15%; Adjusted EPS2 of $3.93, up 18%

•Bookings and options1 of $11.1 billion with 1.0x book-to-bill1

HOUSTON, TX - February 26, 2026 - KBR, Inc. (NYSE: KBR) today announced its fourth quarter and fiscal 2025 results.

“Fiscal 2025 was a year of disciplined execution for KBR as our teams delivered strong operational and financial performance despite a challenging award environment,” said Stuart Bradie, President and Chief Executive Officer.

“We expanded margins, generated robust cash flow, and grew backlog and options while continuing to advance our strategy toward higher‑value, technology‑enabled, and recurring work. Importantly, we also made meaningful progress on the planned spin‑off, sharpening the strategic focus of each business and positioning both companies for long‑term value creation. As we enter fiscal 2026, we are confident in our outlook, supported by strong backlog coverage, improving award momentum, and the continued commitment and performance of our people.”

1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.

2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and 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.

                        1

Summarized Fourth Quarter and Fiscal 2025 Consolidated Results

			Three months ended												Year ended
			January 2,						January 3,						January 2,						January 3,
Dollars in millions, except share data			2026						2025						2026						2025
Revenues			$	1,885					$	2,108					$	7,786					$	7,710
Operating income			191						140						778						659
Net income attributable to KBR (including discontinued operations)			111						76						415						375
Net income attributable to KBR from continuing operations			110						75						451						374
Adjusted EBITDA2			238						226						968						868
Operating income margin			10.1		%				6.6		%				10.0		%				8.5		%
Adjusted EBITDA2 margin			12.6		%				10.7		%				12.4		%				11.3		%
Earnings per share:
Diluted earnings per share attributable to KBR (including discontinued operations)			0.87						0.57						3.21						2.79
Diluted earnings per share from continuing operations			0.87						0.56						3.49						2.78
Adjusted earnings per share2			0.99						0.90						3.93						3.33
Cash flows:
Operating cash flows from continuing operations			51						41						557						450
Return of capital to shareholders:
Payments to repurchase common stock			25						51						329						218
Payments of dividends to shareholders			21						20						84						79
Leverage:
Net debt3															2,117						2,252
TTM Adjusted EBITDA2															968						868
Net leverage															2.2x						2.6x

Fourth Quarter Fiscal 2025 Consolidated Results Review

(All comparisons against the fourth quarter fiscal 2024 unless noted.)

Revenues were $1.9 billion, down 11% or $223 million, due to the slower pace of awards and contingency EUCOM scope reductions.

Operating income was $191 million, up 36% or $51 million, primarily due to increases in Equity in earnings of unconsolidated affiliates, decreases in Selling, general and administrative expenses, and a $26 million resolution of an outstanding contract dispute associated with a legacy U.S. government project that did not recur in the current year.

Net income attributable to KBR was $111 million, up 46% or $35 million, primarily due to increases in Operating income noted above and decreases in Interest expense, partially offset by increases in Provision for income taxes.

Diluted earnings per share attributable to KBR were $0.87, up 53% or $0.30, in line with increased Net income attributable to KBR noted above and lower diluted weighted average common shares outstanding due to open market share repurchases.

Adjusted EBITDA2 was $238 million, up 5% or $12 million, primarily due to strong project execution, favorable mix and prudent cost management. Adjusted EBITDA2 margin was 12.6%, up ~190bps in line with the above.

1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.

2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and 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.

2    

Adjusted earnings per share2 were $0.99, up 10% or $0.09, due to the increase in Adjusted EBITDA2 noted above and lower adjusted weighted average common shares outstanding due to open market share repurchases.

Backlog and options as of the quarter end totaled $23.2 billion, up 13% from the prior year. Book-to-bill1 was 0.9x for the quarter.

Summarized Fourth Quarter and Fiscal 2025 Segment Results

			Three months ended												Year ended
			January 2,						January 3,						January 2,						January 3,
Dollars in millions, Backlog in billions			2026						2025						2026						2025
Revenues			$	1,885					$	2,108					$	7,786					$	7,710
Mission Technology Solutions			1,295						1,508						5,581						5,555
Sustainable Technology Solutions			590						600						2,205						2,155
Adjusted EBITDA2			238						226						968						868
Mission Technology Solutions			145						139						579						544
Sustainable Technology Solutions			121						117						497						439
Corporate			(28)						(30)						(108)						(115)
Adjusted EBITDA2 margin			12.6		%				10.7		%				12.4		%				11.3		%
Mission Technology Solutions			11.2		%				9.2		%				10.4		%				9.8		%
Sustainable Technology Solutions			20.5		%				19.5		%				22.5		%				20.4		%
Backlog															16,864						16,605
Mission Technology Solutions															12,712						12,642
Sustainable Technology Solutions															4,152						3,963
Backlog and options															23,211						20,580
Mission Technology Solutions															19,059						16,617
Sustainable Technology Solutions															4,152						3,963

Fourth Quarter Fiscal 2025 Segment Results Review

(All comparisons against the fourth quarter fiscal 2024 unless noted.)

Mission Technology Solutions (MTS)

Revenues were $1.3 billion, down 14% and $213 million, due to contingency EUCOM scope reductions and procurement delays across U.S. Government Defense and Intelligence clients, funding restrictions from U.S. Government Federal Civilian clients, and delays in new awards, including awards won under protest. Revenues from International Government clients and Commercial clients remained largely consistent with the prior year.

Operating income was $118 million, up 44% and $36 million, due to a $26 million resolution of an outstanding contract dispute associated with a legacy U.S. government project that did not recur in the current year and decreases in Selling, general and administrative expenses driven by the decline in Revenues and cost savings from the segment realignment announced in January 2025. Operating income margin was 9.1%.

Adjusted EBITDA2 was $145 million, up 4% or $6 million, due to strong project execution and favorable mix, along with disciplined management of Selling, general and administrative expenses. Adjusted EBITDA2 margin was 11.2%, up ~198bps from the prior year.

Backlog and options as of the quarter end totaled $19.1 billion, up 15% from the prior year. Book-to-bill1 was 0.5x for the quarter reflecting award cadence timing.

1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.

2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and 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.

3    

The following new business awards were announced:

•Awarded an estimated $117 million cost‑plus‑fixed‑fee follow‑on contract to provide Foreign Military Sales support to NAVAIR’s F/A‑18 and EA‑18G Program Office

•Awarded a technical support services contract by the U.S. Geological Survey with a $350 million ceiling to support operations at the Earth Resources Observation and Science Center

•Awarded two firm‑fixed‑price task orders totaling $103 million to support strategic decision‑making, capability development, and personnel readiness for the U.S. Space Force and Department of the Air Force

•Awarded a $77 million firm‑fixed‑price task order under the U.S. Space Force Decision Support for Headquarters Analysis contract to advance digital engineering and assured communications in support of AFRL and Space Systems Command modernization

•Awarded a cost‑plus‑fixed‑fee contract with a $149 million ceiling under the AFLCMC ADEDDIS program to deliver analytics, digital transformation and systems engineering supporting operator readiness at Eglin Air Force Base

In addition, MTS announced the following positions on IDIQ contracts that provide competitive differentiation and future growth potential:

•Awarded a seat on the Missile Defense Agency’s SHIELD contract, a $151 billion ceiling vehicle supporting homeland and layered missile defense

•Awarded a seat on the NAVSUP WEXMAC 2.1 – Territorial Integrity of the United States contract, a $10 billion ceiling vehicle supporting expeditionary logistics and contingency operations

Sustainable Technology Solutions (STS)

Revenues were $590 million, down 2% or $10 million, driven by delays in new awards as customers reassessed capital allocation, including reduced petrochemicals capex and a pause in certain green projects with increased emphasis on affordability and energy security.

Operating income was $117 million, up 17% or $17 million, primarily due to increases in Equity in earnings of unconsolidated affiliates due to strong project execution on an LNG project and prior year losses on the legacy Ichthys project that did not recur in the current year, partially offset by increases in Selling, general and administrative expenses related to business development growth and the implementation of a new enterprise resource planning system. Operating income margin was 19.8%.

Adjusted EBITDA2 was $121 million, up 3% or $4 million, due to strong project execution. Adjusted EBITDA2 margin was 20.5%, up ~101 bps in line with the above.

Backlog as of the quarter end totaled $4.2 billion, up 5% from the prior year. Book-to-bill1 was 1.6x for the quarter reflecting strengthening award momentum.

The following new business awards were announced:

•Awarded a strategic 10-year digitally-enabled general maintenance services contract for Petro Rabigh's Polymer I and Polymer II plants in the Kingdom of Saudi Arabia

•Awarded an integrated field management services contract by Basra Oil Company for the Majnoon Oil Field in southern Iraq to support production optimization and field modernization

•Awarded a detailed engineering services contract to support Qatar’s offshore development in the Bul Hanine oil and gas field

1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.

2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and 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.

4    

•Awarded a detailed engineering design contract by ENKA İnşaat ve Sanayi A.Ş. for the Associated Gas Upstream Project Phase 2, part of the Gas Growth Integrated Project in the Basra region of Iraq

•Awarded a technology and engineering contract by IGNIS to support the development of a new green ammonia facility in A Coruña, Spain

•Awarded a technology licensing and engineering contract for KBR’s PureMSM green methanol technology by Fikrat Al‑Tadweer to support a biomethanol facility converting landfill gas into clean fuels in Saudi Arabia

•Awarded the front‑end engineering design contract for Coastal Bend’s planned natural gas liquefaction and export facility on the Texas Gulf Coast.

Additionally, during the quarter, KBR announced that its joint venture, Brown & Root Industrial Services (BRIS), has signed a definitive agreement to acquire Specialty Welding and Turnarounds (SWAT), a leading provider of turnaround, cooling tower and industrial catalyst services. This strategic acquisition creates one of the largest specialty welding and turnaround service providers in North America and supports KBR’s strategy to grow recurring service revenue through unconsolidated joint ventures while maintaining a disciplined, capital‑light operating approach. The transaction closed on January 6, 2026.

Balance Sheet, Cash Flow, and Capital Deployment

Liquidity as of January 2, 2026, totaled approximately $1.1 billion, comprising $605 million in borrowing capacity under the revolving credit facility and $500 million cash and cash equivalents. Net leverage ratio as of January 2, 2026, was 2.2x.

Operating cash flows from continuing operations for the quarter were $51 million, up 24% or $10 million. During the fourth quarter, KBR returned $46 million in capital to shareholders, consisting of $25 million in share repurchases (including withhold to cover shares) and $21 million in regular dividends.

On February 19, 2026, the Board of Directors approved a quarterly dividend of $0.165 per share, or $0.66 per share annualized, reflecting our focus on consistency and balance‑sheet discipline during the spin transaction. The dividend is payable April 15, 2026, to shareholders of record on March 13, 2026.

1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.

2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and 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.

5    

Issuing Fiscal 2026 Guidance

KBR issues the following full‑year fiscal 2026 outlook for the consolidated company and plans to update standalone outlooks in connection with the planned spin transaction in the second half of 2026:

Fiscal Year 2026 Guidance

Midpoint

Growth

Revenues

$7.90B - $8.36B

$8.13B

+ 4% at the midpoint

Adjusted EBITDA

$980M - $1,040M

$1,010M

+ 4% at the midpoint

Adjusted EPS

$3.87 - $4.22

$4.05

+ 3% at the midpoint

Adjusted Operating cash flows

$560M - $600M

$580M

+ 4% at the midpoint

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.

Management has provided the following assumptions related to fiscal 2026 guidance:

•Capital expenditures: ~$40 - 50 million

•Effective tax rate: 26% - 28%

•Depreciation & amortization: ~$165 million (includes ~$45 million purchased intangibles amortization)

•Adjusted weighted average common shares outstanding: ~127 million

•Phasing: 46% 1H / 54% 2H

Strategic Intent to Spin Off 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. Upon completion, KBR and its shareholders are expected to benefit from ownership in two pure‑play public companies with enhanced strategic focus, operational independence, and financial flexibility.

In connection with the planned separation, certain perimeter changes were implemented in fiscal 2026 to better align the businesses ahead of the spin‑off, including the transition of Frazer‑Nash Consultancy and the UK Civil Nuclear portfolio to Sustainable Technology Solutions. These changes will be reflected in KBR’s fiscal 2026 SEC filings. Investors are encouraged to refer to the supplemental financial information available in the Investor Relations section of KBR’s website, which has been recast to reflect these updates.

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 during the second half of 2026, 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.

1 As used throughout this release, book-to-bill and bookings and options exclude long-term UK PFIs and the Plaquemines LNG project.

2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, and 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.

6    

Conference Call Details

The company will host a conference call to discuss its fourth quarter and fiscal 2025 results on Thursday, February 26, 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 or by telephone at +1.866.813.9403, passcode: 304270.

About KBR

We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 36,000 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 and the Plaquemines LNG project.

2 As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, Operating cash conversion, and Adjusted operating cash flows and conversion are non-GAAP financial measures. See additional information at the end of this release regarding non-GAAP financial information, including reconciliations to the nearest GAAP measures.

7         

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, 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 Venezuela, and the related impacts on our business; potential adverse economic and market conditions, such as interest rate and currency exchange rate fluctuations, or 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 including compliance with the reconciliation bill H.R. 1; 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 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

8

KBR, Inc.

Consolidated Statements of Operations

(In millions, except for per share data)

(Unaudited)

			Three Months Ended												Year ended
			January 2,						January 3,						January 2,						January 3,
			2026						2025						2026						2025
Revenues:
Mission Technology Solutions			$	1,295					$	1,508					$	5,581					$	5,555
Sustainable Technology Solutions			590						600						2,205						2,155
Total revenues			1,885						2,108						7,786						7,710
Gross profit			290						291						1,150						1,099
Equity in earnings of unconsolidated affiliates			47						10						210						107
Selling, general and administrative expenses			(143)						(153)						(578)						(543)
Other			(3)						(8)						(4)						(4)
Operating income (loss):
Mission Technology Solutions			118						82						463						415
Sustainable Technology Solutions			117						100						477						405
Corporate			(44)						(42)						(162)						(161)
Total operating income			191						140						778						659
Interest expense			(37)						(44)						(158)						(144)
Other non-operating income (expense)			(1)						3						(6)						(7)
Income from continuing operations before income taxes			153						99						614						508
Provision for income taxes			(40)						(22)						(156)						(129)
Net income from continuing operations			113						77						458						379
Net income (loss) from discontinued operations, net of tax			—						1						(55)						2
Net income			113						78						403						381
Less: Net income attributable to noncontrolling interests included in continuing operations			3						2						7						5
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations			(1)						—						(19)						1
Net income attributable to KBR			111						76						415						375
Adjusted EBITDA¹			$	238					$	226					$	968					$	868
Diluted earnings per share from continuing operations			$	0.87					$	0.56					$	3.49					$	2.78
Diluted earnings (loss) per share from discontinued operations			$	—					$	0.01					$	(0.28)					$	0.01
Diluted earnings per share attributable to KBR			$	0.87					$	0.57					$	3.21					$	2.79
Adjusted EPS¹			$	0.99					$	0.90					$	3.93					$	3.33
Diluted weighted average common shares outstanding			127						133						129						134
Adjusted weighted average common shares outstanding			127						133						129						134

1 See additional information at the end of this release regarding non-GAAP financial information, including a reconciliation to the nearest GAAP measure    

9

KBR, Inc.

Consolidated Balance Sheets    

(In millions, except share data)

(Unaudited)

			January 2, 2026						January 3, 2025
Assets
Current assets:
Cash and cash equivalents			$	500					$	342
Accounts receivable, net of allowance for credit losses of $6 and $9, respectively			1,086						1,066
Contract assets			280						271
Other current assets			166						173
Current assets of discontinued operations			19						21
Total current assets			2,051						1,873
Pension assets			89						82
Property, plant and equipment, net of accumulated depreciation of $506 and $474 (including net PPE of $5 and $5 owned by a variable interest entity), respectively			232						237
Operating lease right-of-use assets			217						203
Goodwill			2,677						2,630
Intangible assets, net of accumulated amortization of $501 and $427, respectively			727						763
Equity in and advances to unconsolidated affiliates			107						192
Deferred income taxes			162						209
Other assets			322						396
Non-current assets of discontinued operations			—						78
Total assets			$	6,584					$	6,663
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable			$	712					$	772
Contract liabilities			331						328
Accrued salaries, wages and benefits			342						351
Current maturities of long-term debt			49						36
Other current liabilities			235						280
Current liabilities of discontinued operations			19						15
Total current liabilities			1,688						1,782
Employee compensation and benefits			144						135
Income tax payable			83						122
Deferred income taxes			95						83
Long-term debt			2,547						2,533
Operating lease liabilities			236						228
Other liabilities			279						244
Non-current liabilities of discontinued operations			—						69
Total liabilities			5,072						5,196
Commitments and Contingencies
KBR shareholders' equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued			—						—
Common stock, $0.001 par value 300,000,000 shares authorized, 182,891,428 and 182,469,230 shares issued, and 126,454,289 and 132,435,609 shares outstanding, respectively			—						—
Paid-in capital in excess of par			2,552						2,526
Retained earnings			1,697						1,367
Treasury stock, 56,437,139 shares and 50,033,621 shares, at cost, respectively			(1,818)						(1,494)
Accumulated other comprehensive loss			(928)						(946)
Total KBR shareholders' equity			1,503						1,453
Noncontrolling interests			9						14
Total shareholders' equity			1,512						1,467
Total liabilities and shareholders’ equity			$	6,584					$	6,663

10

KBR, Inc.

Consolidated Statements of Cash Flows

(In millions) (Unaudited)

			Year ended
			January 2, 2026						January 3, 2025
Cash flows from operating activities:
Net income			$	403					$	381
Net (income) loss from discontinued operations, net of tax			55						(2)
Net income from continuing operations			458						379
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			169						156
Equity in earnings of unconsolidated affiliates			(210)						(107)
Deferred income tax			60						1
Other			(1)						(11)
Changes in operating assets and liabilities, net of acquired businesses:
Accounts receivable, net of allowance for credit losses			(2)						5
Contract assets			(3)						(93)
Accounts payable			(70)						147
Contract liabilities			(16)						(29)
Accrued salaries, wages and benefits			(2)						(7)
Payments on operating lease liabilities			(81)						(71)
Payments from unconsolidated affiliates, net			9						9
Distributions of earnings from unconsolidated affiliates			170						163
Pension funding			(3)						(62)
Other assets and liabilities			79						(30)
Total cash flows provided by operating activities - continuing operations			$	557					$	450
Cash flows from investing activities:
Purchases of property, plant and equipment			$	(42)					$	(52)
Proceeds from sale of assets or investments			3						7
Return of equity method investments, net			82						36
Acquisitions of businesses, net of cash acquired			(14)						(738)
Funding in other investment			(10)						(5)
Other			(3)						1
Total cash flows provided by (used in) investing activities - continuing operations			16						(751)
Cash flows from financing activities:
Borrowings on short-term and long-term debt			$	—					$	574
Borrowings on Revolver			555						393
Payments on short-term and long-term debt			(36)						(124)
Payments on Revolver			(505)						(98)
Payments to repurchase common stock			(329)						(218)
Payments on settlement of warrants			—						(33)
Debt issuance costs			—						(18)
Acquisition of noncontrolling interest			—						(10)
Payments of dividends to shareholders			(84)						(79)
Other			(4)						(13)
Total cash flows provided by (used in) financing activities - continuing operations			$	(403)					$	374
Total operating cash flows from discontinued operations			(33)						12
Total investing cash flows from discontinued operations			(12)						(25)
Total financing cash flows from discontinued operations			12						—
Total cash flows from discontinued operations			$	(33)					$	(13)
Effect of exchange rate changes on cash			18						(14)
Increase in cash and cash equivalents			155						46
Cash and cash equivalents at beginning of period			350						304
Cash and cash equivalents at end of period			$	505					$	350
Less: cash and cash equivalents of discontinued operations			5						8
Cash and cash equivalents at end of period for continuing operations			$	500					$	342
Supplemental disclosure of cash flows information:
Noncash financing activities
Dividends declared			$	21					$	20

11

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; 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 Depreciation and amortization; 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 twelve-month periods ended January 2, 2026 and January 3, 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 twelve-month periods ended January 2, 2026 and January 3, 2025 and also affords investors the ability to make a more informed assessment of such core performance for the comparable periods.

			Three Months Ended												Years Ended
			January 2,						January 3,						January 2,						January 3,
Dollars in millions			2026						2025						2026						2025
Net income attributable to KBR			$	111					$	76					$	415					$	375
Net (income) loss from discontinued operations, net of tax			—						(1)						55						(2)
Net income (loss) attributable to noncontrolling interest included in discontinued operations			(1)						—						(19)						1
Net income attributable to KBR from continuing operations			$	110					$	75					$	451					$	374
•Interest expense			37						44						158						144
•Other non-operating expense (income)			1						(3)						6						7
•Provision for income taxes			40						22						156						129
•Depreciation and amortization			40						44						169						156
•Spin off, acquisition and integration			10						8						28						23
•Ichthys commercial dispute cost			—						10						—						11
•Legacy legal fees and settlements			—						26						—						24
Adjusted EBITDA			$	238					$	226					$	968					$	868

12

			Three Months Ended												Year ended
			January 2,						January 3,						January 2,						January 3,
Dollars in millions			2026						2025						2026						2025
Operating income - MTS			$	118					$	82					$	463					$	415
•Net (income) loss attributable to noncontrolling interests included in continuing operations			(1)						1						—						1
•Depreciation and amortization			27						28						115						99
•Spin off, acquisition and integration			1						2						1						5
•Legacy legal fees and settlements			—						26						—						24
Adjusted EBITDA - MTS			$	145					$	139					$	579					$	544
Operating income - STS			$	117					$	100					$	477					$	405
•Net income attributable to noncontrolling interests included in continuing operations			(2)						(3)						(7)						(6)
•Depreciation and amortization			6						8						27						27
•Spin off, acquisition and integration			—						2						—						2
•Ichthys commercial dispute cost			—						10						—						11
Adjusted EBITDA - STS			$	121					$	117					$	497					$	439
Operating loss - Corporate			$	(44)					$	(42)					$	(162)					$	(161)
•Depreciation and amortization			7						8						27						30
•Spin off, acquisition and integration			9						4						27						16
Adjusted EBITDA - Corporate			$	(28)					$	(30)					$	(108)					$	(115)
Operating income - KBR			$	191					$	140					$	778					$	659
•Net income attributable to noncontrolling interests included in continuing operations			(3)						(2)						(7)						(5)
•Depreciation and amortization			40						44						169						156
•Spin off, acquisition and integration			10						8						28						23
•Legacy legal fee and settlements			—						26						—						24
•Ichthys commercial dispute cost			—						10						—						11
Adjusted EBITDA - KBR			$	238					$	226					$	968					$	868

13

Adjusted EPS

Adjusted earnings per share (Adjusted EPS) for each of the three- and twelve-month periods ended January 2, 2026 and January 3, 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 twelve-month periods ended January 2, 2026 and January 3, 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												Year ended
			January 2,						January 3,						January 2,						January 3,
			2026						2025						2026						2025
Diluted EPS attributable to KBR			$	0.87					$	0.57					$	3.21					$	2.79
Less: Diluted earnings (loss) per share from discontinued operations			—						0.01						(0.28)						0.01
Diluted EPS from continuing operations			$	0.87					$	0.56					$	3.49					$	2.78
•Amortization related to acquisitions			0.06						0.07						0.28						0.20
•Ichthys commercial dispute cost			—						0.08						—						0.09
•Spin off, acquisition and integration			0.06						0.05						0.16						0.13
•Legacy legal fees and settlements			—						0.14						—						0.13
Adjusted EPS			$	0.99					$	0.90					$	3.93					$	3.33
Diluted weighted average common shares outstanding			127						133						129						134
Adjusted weighted average common shares outstanding			127						133						129						134

Operating Cash Conversion

Operating cash conversion is considered a non-GAAP financial measure under SEC rules. Operating cash conversion is calculated as Operating cash flows from continuing operations divided by Adjusted weighted average common shares outstanding, which is then divided by Adjusted earnings per share. Management believes that Operating cash conversion affords investors a view of what management considers KBR's core operating cash flow performance for each of the three- and twelve-month periods ended January 2, 2026 and January 3, 2025 and also afford investors the ability to make a more informed assessment of such core operating cash generation performance.

			Three months ended												Year ended
			January 2,						January 3,						January 2,						January 3,
Dollars in millions, except per share amounts			2026						2025						2026						2025
Operating cash flows from continuing operations			$51						$41						$557						$450
Operating cash flow per adjusted share			$0.40						$0.31						$4.32						$3.36
Adjusted earnings per share			0.99						0.90						3.93						3.33
Operating cash conversion			40%						34%						110%						101%

14

FAQ

How did KBR (KBR) perform financially in fiscal 2025?

KBR delivered modest revenue growth and strong profit expansion in 2025. Revenue was $7.8 billion, up 1%, while net income attributable to KBR rose 11% to $415 million. Diluted EPS increased 15% to $3.21 and Adjusted EPS climbed 18% to $3.93.

What were KBR’s key profitability and margin metrics for 2025?

KBR’s 2025 Adjusted EBITDA reached $968 million, up 12% from 2024. Adjusted EBITDA margin improved to 12.4% from 11.3%. Operating income was $778 million, up 18%, and operating income margin increased to 10.0%, reflecting better mix, execution, and lower SG&A.

How did KBR’s fourth-quarter 2025 results compare to the prior year?

In the fourth quarter, KBR’s revenue declined 11% to $1.9 billion, mainly from slower awards and EUCOM scope reductions. Despite this, net income attributable to KBR rose 46% to $111 million, and diluted EPS grew 53% to $0.87, with Adjusted EPS up 10% to $0.99.

What is KBR’s 2026 financial guidance for revenue and earnings?

For fiscal 2026, KBR guides revenue between $7.90 billion and $8.36 billion, with a midpoint of $8.13 billion. Adjusted EBITDA is projected at $980 million–$1,040 million and Adjusted EPS at $3.87–$4.22, implying low to mid-single-digit growth over 2025 levels.

What does KBR’s backlog and book-to-bill look like after 2025?

At the end of fiscal 2025, KBR’s backlog and options totaled $23.2 billion, up 13% year over year. Company-wide book-to-bill was 0.9x for the fourth quarter, while Mission Technology Solutions posted 0.5x and Sustainable Technology Solutions achieved 1.6x.

What is KBR’s plan for the Mission Technology Solutions spin-off?

KBR intends to spin off its Mission Technology Solutions segment as a separate U.S. public company. The transaction is planned to be tax-free for U.S. federal income tax purposes and targets completion in the second half of 2026, subject to board approval and customary conditions.

How strong is KBR’s balance sheet and cash flow position?

As of January 2, 2026, KBR had approximately $1.1 billion of liquidity, including $500 million of cash and $605 million of revolver capacity. Net leverage stood at 2.2x, and operating cash flows from continuing operations were $557 million, supporting dividends and share repurchases.

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