The quarter beat on adjusted EPS but missed on revenue. The published Q3 expectation was roughly $3.57 billion of revenue and $0.61 of EPS; Amentum delivered $3.49 billion and $0.67 of adjusted diluted EPS. That means the earnings result was better than expected, but the top-line shortfall was not trivial. Revenue fell 2% year over year, with Global Engineering Solutions down 5%, while adjusted EBITDA rose 6% and margin expanded 60 basis points. (Summary Operating Results; Segment results)
| Metric | Q3 FY2026 | Q3 FY2025 / prior expectation | Read |
|---|---|---|---|
| Revenue | $3,490 million (Summary Operating Results) | $3,561 million prior year; ~$3,570 million published expectation | Below both |
| Adjusted EBITDA | $290 million (Summary Operating Results) | $274 million prior year | Up 6% |
| Adjusted EBITDA margin | 8.3% (Summary Operating Results) | 7.7% prior year | Up 60 bps |
| Adjusted diluted EPS | $0.67 (Summary Operating Results) | $0.56 prior year; ~$0.61 published expectation | Beat |
| Free cash flow | $135 million (Summary Operating Results) | $100 million prior year | Up 35% |
| Total backlog | $48.2 billion (Backlog) | $44.6 billion prior year | Up 8% |
The guidance change exposes the quarter's central tension: weaker growth, better conversion. Full-year revenue guidance was cut to $13.80-$13.95 billion from $13.95-$14.30 billion, reducing the midpoint by about $250 million. At the same time, adjusted EBITDA guidance increased to $1.115-$1.140 billion from $1.100-$1.140 billion, and adjusted EPS guidance rose to $2.40-$2.50 from $2.25-$2.45. Free-cash-flow guidance was unchanged at $525-$575 million. (Updated Guidance)
Margin execution is doing the work that revenue growth is not. Global Engineering Solutions revenue declined 5%, but its adjusted EBITDA increased 9%, while Digital Solutions revenue rose 3% and adjusted EBITDA increased 2%. The filing attributes the pressure to contract transitions, divestitures, and expected run-downs of older programs, while new awards are ramping more slowly. (Segment results — Digital Solutions; Segment results — Global Engineering Solutions)
Backlog and cash flow support the longer-term picture, but do not erase the near-term reset. Net bookings of $17.7 billion produced a 1.3x book-to-bill ratio, with funded backlog up 10% to $6.2 billion. Quarterly free cash flow was $135 million, although operating cash flow benefited from one additional pay cycle. Amentum also made a voluntary $125 million Term Loan B payment; gross debt remained $3.875 billion and net leverage was 3.0x. (Backlog; Cash Flow statement; Net Leverage)
Net read: mixed rather than a clean beat. The company delivered better-than-expected adjusted earnings through stronger margins and lower interest expense, but the revenue miss and reduced full-year revenue outlook show that near-term volume assumptions have weakened. Raising EBITDA and EPS guidance keeps the fundamental message constructive on profitability, while the lower revenue target prevents the filing from reading as unequivocally positive.
Read the original 8-K on SEC EDGAR ↗