What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-11 compared with 2026-05-12 · 60 added, 59 removed, 134 unchanged (47% of the section changed)

17 unchanged sentences

government and allied nations.

presentation of financial results as two reportable segments is consistent with the way the Company operates its business and the manner in which our chief operating decision maker (“CODM”), currently our Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

The presentation of financial results as two reportable segments is consistent with the way the Company operates its business and the manner in which our chief operating decision maker (“CODM”), currently our Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

Budgetary and Regulatory Environment

5 unchanged sentences

Following a government shutdown from October 2, 2025 to November 12, 2025 and a partial government shutdown from January 31, 2026 to February 3, 2026, final appropriations legislation for the U.S.

federal government fiscal year (“GFY”) 2026 was passed on February 3, 2026, excluding the Department of Homeland Security which was shutdown on February 14, 2026, following the expiration of a continuing resolution (“CR”).

On April 30, 2026, GFY 2026 funding for the Department of Homeland Security was passed, ending the partial shutdown.

The final bill provided $900 billion for defense discretionary spending and $700 billion for non-defense discretionary spending.

Additionally, the budget request assumes an increase in defense spending based on the defense reconciliation legislation currently pending in Congress, which would result in total GFY 2027 defense spending of $1.5 trillion, an increase of 43% from the GFY 2026 enacted level.

While we view the budget environment as constructive and believe core funding sources for our primary customer-based markets will continue to experience bipartisan tailwinds, there can be no certainty about the level of funding for any particular GFY or that appropriations bills will be passed in a timely manner.

During those periods of time when appropriations bills have not been passed and signed into law, government agencies operate under a CR, a temporary measure allowing the government to continue operations at prior year funding levels.

federal government fiscal year (“GFY”) 2026 was passed on February 3, 2026 for all government agencies except the Department of Homeland Security, which remained shutdown until funding was passed on April 30, 2026.

In April 2026, the GFY 2027 budget request was submitted to Congress, which, as compared to GFY 2026 enacted levels, would increase defense discretionary spending by $250 billion to $1.15 trillion, and based on defense reconciliation legislation currently pending in Congress, would result in total GFY 2027 defense spending of $1.5 trillion, an increase of 43% from the GFY 2026 enacted level.

While we view the budget environment as constructive and believe core funding sources for our primary customer-based markets will continue to experience bipartisan support, there can be no certainty about the level of funding for any particular GFY or that appropriations bills will be passed in a timely manner.

During those periods of time when appropriations bills have not been passed and signed into law, government agencies operate under a continuing resolution (“CR”), a temporary measure allowing the government to continue operations at prior year funding levels.

Depending on their scope, duration, and other factors, CRs can negatively impact our business due to delays in new program starts, delays in contract awards decisions, and other factors.

We continue to monitor the actions of the administration which could result in a change to budgetary priorities or impact federal government procurement timing.

We continue to monitor the actions of the administration, including NASA’s increased focus on insourcing certain activities, which could result in a change to budgetary priorities or impact federal government procurement timing.

Although a limited number of our contracts for the U.S.

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• Increased investment in advanced technologies (e.g., hypersonics, microelectronics, unmanned, electromagnetic spectrum).

Results of Operations for the Three Months Ended April 3, 2026 and March 28, 2025

Results of Operations for the Three Months Ended July 3, 2026 and June 27, 2025

The following table presents our results of operations for the periods presented:

Three Months Ended

April 3, 2026 March 28, 2025 Change

July 3, 2026 June 27, 2025 Change

(Dollars in millions) Dollars Dollars Dollars Percent

6 unchanged sentences

Interest expense and other, net (62) (88) 26 (29.5)

Loss on extinguishment of debt (16) (3) (13) 433.3

Income before income taxes 94 12 82 683.3

Provision for income taxes (28) (13) (15) 115.4

Net income including non-controlling interests 54 2 52 2,600.0

net income attributable to non-controlling interests — 2 (2) (100.0)

Net income (loss) including non-controlling interests 66 (1) 67 (6,700.0)

net income (loss) attributable to non-controlling interests — 11 (11) (100.0)

Net income attributable to common shareholders $ 66 $ 10 $ 56 560.0

Revenues — The decrease in revenues was primarily attributable to the transition of certain contracts from consolidated to unconsolidated joint ventures and fiscal year 2025 divestitures partially offset by the net impact of the expected ramp-down of historical programs and the ramp up of new contract awards and growth on existing programs.

Cost of revenues — The increase in cost of revenues was primarily attributable to the timing of expenses.

As a percentage of revenues, cost of revenues was 90.1% for the three months ended April 3, 2026 compared to 89.5% for the three months ended March 28, 2025.

Cost of revenues — The decrease in cost of revenues was primarily attributable to decrease in revenues discussed above.

As a percentage of revenues, cost of revenues was 89.7% for both the three months ended July 3, 2026 and June 27, 2025.

Selling, general, and administrative expenses (“SG&A”) — The decrease in SG&A was primarily attributable to synergies arising from the merger of the Jacobs Solutions Inc.

(“Jacobs”) Critical Mission Solutions business and portions of the Jacobs Divergent Solutions business (and, together with the Critical Mission Solutions business, referred to as “CMS”).

SG&A as a percentage of revenues decreased to 3.6% for the three months ended April 3, 2026 from 4.2% for the three months ended March 28, 2025 primarily due to the reduction in SG&A discussed above.

SG&A as a percentage of revenues decreased to 3.5% for the three months ended July 3, 2026 from 4.6% for the three months ended June 27, 2025 primarily due to the reduction in SG&A discussed above.

Amortization of intangibles — Amortization of intangibles primarily relates to the amortization of our backlog and customer relationship intangible assets, which decreased due to the full amortization of backlog associated with the CMS merger in the prior year.

Equity earnings of non-consolidated subsidiaries — Equity earnings of non-consolidated subsidiaries include our proportionate share of the income from equity method investments partially offset by the utilization of fair market value adjustments assigned to certain equity method investments based on the remaining period of performance for the related contract and increased primarily due to the transition of certain contracts from consolidated to unconsolidated joint ventures.

Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our term loan principal balance as compared to the three months ended March 28, 2025.

Provision for income taxes — The effective tax rate for the three months ended April 3, 2026 was 30.8%, as compared to 91.7% for the three months ended March 28, 2025.

Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our term facility principal balance as compared to the three months ended June 27, 2025 and more favorable rates due to the first amendment to the Credit Facility (the “Amendment”).

Loss on extinguishment of debt — The loss on extinguishment of debt was due to the Amendment and a $125 million voluntary principal payment on the Term Loan B for the three months ended July 3, 2026 and a $191 million voluntary principal payment on the term facility for the three months ended June 27, 2025.

Provision for income taxes — The effective tax rate for the three months ended July 3, 2026 was 29.8%, as compared to 108.3% for the three months ended June 27, 2025.

The change in the effective tax rate was primarily due to the recognition of a valuation allowance against a disallowed interest expense deferred tax asset relative to income before income taxes in the respective period.

Net income attributable to non-controlling interests — Net income attributable to non-controlling interests includes the utilization of fair market value adjustments assigned to certain non-controlling interests based on the remaining period of performance for the related contract partially offset by the minority interests in our consolidated joint ventures that are not wholly-owned and was consistent with the three months ended March 28, 2025.

Results of Operations for the Six Months Ended April 3, 2026 and March 28, 2025

Net income attributable to non-controlling interests — Net income attributable to non-controlling interests includes the utilization of fair market value adjustments assigned to certain non-controlling interests based on the remaining period of performance for the related contract partially offset by the minority interests in our consolidated joint ventures that are not wholly-owned and decreased due to the completion of certain contracts with follow-on contracts which transitioned to equity method investments.

Results of Operations for the Nine Months Ended July 3, 2026 and June 27, 2025

The following table presents our results of operations for the periods presented:

Six Months Ended

April 3, 2026 March 28, 2025 Change

Nine Months Ended

July 3, 2026 June 27, 2025 Change

(Dollars in millions) Dollars Dollars Dollars Percent

6 unchanged sentences

Interest expense and other, net (209) (261) 52 (19.9)

Loss on extinguishment of debt (16) (3) (13) 433.3

Income before income taxes 236 81 155 191.4

6 unchanged sentences

Cost of revenues — The decrease in cost of revenues was primarily attributable to the decrease in revenues discussed above.

As a percentage of revenues, cost of revenues was 90.0% for the six months ended April 3, 2026 compared to 89.5% for the six months ended March 28, 2025.

As a percentage of revenues, cost of revenues was 89.9% for the nine months ended July 3, 2026 compared to 89.5% for the nine months ended June 27, 2025.

Selling, general, and administrative expenses (“SG&A”) — The decrease in SG&A was primarily attributable to synergies arising from the CMS merger.

SG&A as a percentage of revenues decreased to 3.6% for the six months ended April 3, 2026 from 4.0% for the six months ended March 28, 2025 primarily due to the reduction in SG&A discussed above.

SG&A as a percentage of revenues decreased to 3.5% for the nine months ended July 3, 2026 from 4.2% for the nine months ended June 27, 2025 primarily due to the reduction in SG&A discussed above.

Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our term loan principal balance as compared to the six months ended March 28, 2025.

Provision for income taxes — The effective tax rate for the six months ended April 3, 2026 was 31.0%, as compared to 66.7% for the six months ended March 28, 2025.

Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our term facility principal balance as compared to the nine months ended June 27, 2025 and more favorable rates due to the Amendment.

Loss on extinguishment of debt — The loss on extinguishment of debt was due to the Amendment and a $125 million voluntary principal payment on the Term Loan B for the nine months ended July 3, 2026 and a $191 million voluntary principal payment on the term facility for the nine months ended June 27, 2025.

Provision for income taxes — The effective tax rate for the nine months ended July 3, 2026 was 30.5%, as compared to 72.8% for the nine months ended June 27, 2025.

Net income attributable to non-controlling interests — Net income attributable to non-controlling interests includes the utilization of fair market value adjustments assigned to certain non-controlling interests based on the remaining period of performance for the related contract partially offset by the minority interests in our consolidated joint ventures that are not wholly-owned and decreased due to the completion of certain contracts with follow-on contracts which transitioned to equity method investments.

Segment Results for the Three and Six Months Ended April 3, 2026 and March 28, 2025

Segment Results for the Three and Nine Months Ended July 3, 2026 and June 27, 2025

The primary financial performance measures we use to manage our reportable segments and monitor results of operations are revenues and Adjusted EBITDA.

1 unchanged sentence

Digital Solutions

Three Months Ended Six Months Ended

April 3, 2026 March 28, 2025 Change April 3, 2026 March 28, 2025 Change

Three Months Ended Nine Months Ended

July 3, 2026 June 27, 2025 Change July 3, 2026 June 27, 2025 Change

(Dollars in millions) Dollars Dollars Dollars Percent Dollars Dollars Dollars Percent

1 unchanged sentence

Adjusted EBITDA 116 114 2 2 % 324 321 3 1 %

The increase in revenues for the three and six months ended April 3, 2026, as compared to the three and six months ended March 28, 2025, was primarily attributable to the ramp up of new contract awards and growth on existing programs and partially offset by the fiscal year 2025 divestiture of Rapid Solutions.

Adjusted EBITDA as a percentage of revenues decreased for the three and six months ended April 3, 2026 due to the divestiture and higher net program write-ups in the prior year quarter, partially offset by the increased revenue volume.

The increase in revenues for the three and nine months ended July 3, 2026, as compared to the three and nine months ended June 27, 2025, was primarily attributable to the ramp up of new contract awards and growth on existing programs and partially offset by the fiscal year 2025 divestiture of Rapid Solutions.

The increase in Adjusted EBITDA for the three and nine months ended July 3, 2026, as compared to the three and nine months ended June 27, 2025, was primarily attributable to increased revenue volume, partially offset by the divestiture of Rapid Solutions and higher net program write-ups in the prior year.

Global Engineering Solutions

Three Months Ended Six Months Ended

April 3, 2026 March 28, 2025 Change April 3, 2026 March 28, 2025 Change

Three Months Ended Nine Months Ended

July 3, 2026 June 27, 2025 Change July 3, 2026 June 27, 2025 Change

(Dollars in millions) Dollars Dollars Dollars Percent Dollars Dollars Dollars Percent

1 unchanged sentence

Adjusted EBITDA 174 160 14 9 % 504 483 21 4 %

The decrease in revenues for the three months ended April 3, 2026, as compared to the three months ended March 28, 2025, was primarily attributable to the transition of certain contracts from consolidated to unconsolidated joint ventures, a fiscal year 2025 divestiture, and the expected ramp-down of historical programs.

The decrease in revenues for the three months ended July 3, 2026, as compared to the three months ended June 27, 2025, was primarily attributable to the transition of certain contracts from consolidated to unconsolidated joint ventures, a fiscal year 2025 divestiture, and the expected ramp-down of historical programs.

The reduction in revenues was partially offset by the ramp up of new contract awards and growth on existing programs.

The decrease in revenues for the six months ended April 3, 2026, as compared to the six months ended March 28, 2025, was primarily attributable to the factors described above and from the government shutdown in the first quarter of fiscal year 2026.

The increase in Adjusted EBITDA for the three and six months ended April 3, 2026, as compared to the three and six months ended March 28, 2025, was primarily attributable to strong operational performance partially offset by the change in revenues described above.

The decrease in revenues for the nine months ended July 3, 2026, as compared to the nine months ended June 27, 2025, was primarily attributable to the factors described above and from the government shutdown in the first quarter of fiscal year 2026.

The increase in Adjusted EBITDA for the three and nine months ended July 3, 2026, as compared to the three and nine months ended June 27, 2025, was primarily attributable to strong operational performance partially offset by the change in revenues described above.

Revenues by Contract Type

2 unchanged sentences

The following table summarizes revenues by contract type as a percentage of each reportable segment and total Amentum revenues, for the periods presented:

Three months ended Six months ended

April 3, 2026 March 28, 2025 April 3, 2026 March 28, 2025

Three months ended Nine months ended

July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025

DS GES Total DS GES Total DS GES Total DS GES Total

8 unchanged sentences

• Unfunded backlog represents estimated values that have the potential to be recognized as revenues from negotiated contracts for which funding has not been appropriated and from unexercised contract options.

As of April 3, 2026, the Company had total backlog of $47.8 billion, compared with $44.8 billion as of March 28, 2025, an increase of $3.0 billion primarily due to new contract wins partially offset by revenue recognized on current contracts.

Funded backlog as of April 3, 2026 was $6.9 billion.

As of July 3, 2026, the Company had total backlog of $48.2 billion, compared with $44.6 billion as of June 27, 2025, an increase of $3.6 billion primarily due to new contract wins partially offset by revenue recognized on current contracts.

Funded backlog as of July 3, 2026 was $6.2 billion.

The Company’s backlog, by reportable segment and in total, consisted of the following (in millions):

April 3, 2026 March 28, 2025

July 3, 2026 June 27, 2025

DS GES Total DS GES Total

5 unchanged sentences

Given the nature of our operations and contract type mix, we expect the impact of inflation on our business may be limited for some of our contracts.

During the six months ended April 3, 2026, 57% of our revenues was generated under cost-plus-fee type contracts that have limited inflation risk as they include provisions that adjust revenues to cover costs affected by inflation.

During the nine months ended July 3, 2026, 56% of our revenues was generated under cost-plus-fee type contracts that have limited inflation risk as they include provisions that adjust revenues to cover costs affected by inflation.

The remainder of our revenues was generated under time-and-materials or fixed-price type contracts which we have historically been able to price in a manner that accommodates inflation and cost increases over the period of performance but changes in our expectations with respect to inflation rates or in the overall mix of our contract types could cause future results to differ substantially.

1 unchanged sentence

Existing cash and cash equivalents and cash generated by operations are our primary sources of liquidity, as well as sales of receivables under our Master Accounts Receivable Purchase Agreement (“MARPA”) and available borrowing capacity under the revolving credit facility provided for in the senior secured credit facility (the “Credit Facility”).

The Credit Facility consisted of our term facility (“Term Loan”) maturing on September 27, 2031 and a $850 million revolving facility (“Revolver”) maturing on September 27, 2029, which included a $200 million letter of credit subfacility and a $100 million swingline subfacility.

The Term Loan required quarterly principal amortization payments of $9 million, which commenced on March 31, 2025, with the remainder of the principal thereunder being due at maturity.

The interest rates applicable to the Term Loan were floating interest rates equal to an Alternate Base Rate or Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin based upon our net leverage ratio.

On April 24, 2026, we entered into the first amendment to the Credit Facility.

The amendment established a new $1,400 million senior secured term loan A facility (“Term Loan A”) due April 2031, amended the existing Term Loan, including a reduction in outstanding principal and revised terms, into a new $1,591 million senior secured term loan B facility (“Term Loan B”) due September 2031 and increased the Revolver by $150 million.

See Note 14 — Subsequent Events of the notes to the condensed consolidated financial statements contained within this Quarterly Report on Form 10-Q.

On April 24, 2026, we entered into the Amendment to the Credit Facility.

As amended, the Credit Facility consists of a $1,400 million senior secured term loan A facility (“Term Loan A”) due April 24, 2031, a $1,591 million senior secured term loan B facility (“Term Loan B”) due September 27, 2031 and a $1 billion revolving facility (“Revolver”) maturing on April 24, 2031, which includes a $250 million letter of credit subfacility and a $150 million swingline subfacility.

Quarterly principal amortization payments on Term Loan A are equal to (a) 0.625% of the original principal amount of Term Loan A commencing September 30, 2026 through June 30, 2028, (b) 1.25% of the original principal amount of Term Loan A from September 30, 2028 through June 30, 2030, and (c) 1.875% of the original principal amount of Term Loan A thereafter with the remainder of

the principal being due at maturity.

Quarterly principal amortization payments on Term Loan B are equal to 0.25% of the original principal amount of Term Loan B commencing September 30, 2026, with the remainder of the principal being due at maturity.

The interest rates applicable to the Term Loan A and Term Loan B are floating interest rates equal to an Alternate Base Rate or Adjusted Term Secured Overnight Financing Rate plus an applicable margin based upon our net leverage ratio.

In August 2024, the Company also completed an offering of $1,000 million in aggregate principal amount of 7.250% senior notes due August 1, 2032 (the “Senior Notes”).

The Credit Facility and the Senior Notes are guaranteed by substantially all of our wholly owned material domestic restricted subsidiaries, subject to customary exceptions set forth in the credit agreement and indenture, respectively.

Each of the credit agreement and indenture requires us to comply with certain representations and warranties, customary affirmative and negative covenants and, in the case of the Revolver, under certain circumstances, a financial covenant.

We were in compliance with all covenants as of April 3, 2026.

Each of the credit agreement and indenture requires us to comply with certain representations and warranties, customary affirmative and negative covenants and, in the case of the Term Loan A and Revolver, under certain circumstances, a financial covenant.

We were in compliance with all covenants as of July 3, 2026.

We believe that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund on-going operations, capital expenditures, scheduled principal and interest payments on our debt obligations, scheduled lease payments, and other working capital requirements over at least the next twelve months.

could be affected by factors outside of our control, including, but not limited to, worldwide economic and financial market conditions.

As part of our debt reduction initiatives, we made a $125 million voluntary principal payment on the Term Loan B on June 30, 2026.

Over the longer term, our ability to generate sufficient cash flows from operations necessary to fulfill the obligations under the Credit Facility, Senior Notes and any other indebtedness we may incur will depend on our future financial performance which could be affected by factors outside of our control, including, but not limited to, worldwide economic and financial market conditions.

See “Note 5 — Sales of Receivables” and “Note 8 — Debt” of the notes to the condensed consolidated financial statements contained within this Quarterly Report on Form 10-Q.

Cash Flow Information

Six Months Ended

(Amounts in millions) April 3, 2026 March 28, 2025

Nine Months Ended

(Amounts in millions) July 3, 2026 June 27, 2025

Net cash provided by operating activities $ 235 $ 273

Net cash used in investing activities (51) (39)

Net cash (used in) provided by investing activities (48) 236

Net cash used in financing activities (165) (231)

1 unchanged sentence

Net change in cash and cash equivalents $ 22 $ 286

Net cash provided by operating activities decreased by $78 million for the six months ended April 3, 2026 when compared to the six months ended March 28, 2025 as a result of a $38 million increase in cash earnings offset by $116 million in changes in operating assets and liabilities.

Net cash used in investing activities increased by $12 million for the six months ended April 3, 2026 when compared to the six months ended March 28, 2025 primarily due to contributions to equity method investments partially offset by returns of capital from equity method investments.

Net cash used in financing activities increased by $16 million for the six months ended April 3, 2026 when compared to the six months ended March 28, 2025 primarily due to the principal payments on our Term Loan, which were not required in first and second quarters of fiscal year 2025.

Net cash provided by operating activities decreased by $38 million for the nine months ended July 3, 2026 when compared to the nine months ended June 27, 2025 as a result of a $129 million increase in cash earnings offset by $167 million in changes in operating assets and liabilities.

Net cash used in investing activities decreased by $284 million for the nine months ended July 3, 2026 when compared to the nine months ended June 27, 2025 primarily due the prior year sale of the Rapid Solutions business partially offset by the prior year cash payment made as part of the Transaction based on the final net working capital position.

Net cash used in financing activities decreased by $66 million for the nine months ended July 3, 2026 when compared to the nine months ended June 27, 2025 primarily due to the reduction in voluntary principal payments on the Term Loan B, which were $125 million and $191 million for the nine months ended July 3, 2026 and June 27, 2025, respectively.

Critical Accounting Policies and Estimates

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis