AMTM's Post-Spin-Off Results Highlight a Year of Transition and Opportunities for Growth

Discontinued Operations Drive GAAP Results Down, but Underlying Sectors Show Promise

Following its separation from Jacobs Solutions Inc., Amentum Holdings, Inc. (NYSE:AMTM) released its first set of full-year financial results as an independent public company. As is often the case with newly spun-off entities, headline figures are shaped by non-recurring events and accounting treatments—particularly the recognition of results from discontinued operations and non-cash adjustments related to the transaction.

The numbers underscore a year of transition: GAAP net earnings attributable to Jacobs from discontinued operations fell to $(23.97) million for fiscal 2025, down from a positive $193.29 million a year ago. For context, these figures capture AMTM's legacy operations within Jacobs prior to the September 2024 spin-off and include several one-time adjustments linked to the separation process.

Operational Cash Flow Remains Resilient Post-Spin

Despite headline GAAP declines driven by discontinued operations, the cash-generating engine for the underlying business remains robust. For fiscal 2025, AMTM’s cash provided by operating activities (in discontinued ops) stood at $686.70 million, though it decreased from the $1.05 billion reported in fiscal 2024. While down year over year—largely reflecting spin-off related dislocations—this still highlights a solid ability to generate cash, positioning the business to self-fund future investments.

Backlog Remains Steady as Sector Fundamentals Support Growth

One positive indicator for AMTM’s outlook is the resilience of the project backlog. The Infrastructure & Advanced Facilities (I&AF) segment—formerly housed within Jacobs and now representing a core focus—ended the year with a backlog of $22.65 billion, up from $21.47 billion a year ago. Total backlog including the consulting arm rose to $23.06 billion, supporting revenue visibility for fiscal 2026 and beyond.

Sector Strengths: Life Sciences, Energy & Power, and Data Centers in Focus

Management commentary from Jacobs emphasized that life sciences, energy & power, transportation, and water markets have been the biggest drivers of Infrastructure & Advanced Facilities revenue. PA Consulting—a partner and synergistic growth platform—also posted accelerated revenue growth, underlining a healthy demand for advisory services within AMTM's addressable markets. With the public and private sector demand for infrastructure upgrades and resiliency remaining high, AMTM is poised to capitalize on these multi-year industry tailwinds.

Balance Sheet and Capital Return Policies Offer Stability

At the time of the spin, AMTM’s balance sheet inherited solid liquidity. Cash and cash equivalents in the former Jacobs structure ended fiscal 2025 at $1.24 billion, supporting ongoing investments and working capital needs. Jacobs, for its part, returned a record $1.1 billion to shareholders through dividends and repurchases over the last year—a shareholder-friendly precedent that may inform AMTM’s future approach as a standalone entity.

Guidance: Management Projects Earnings and Margin Expansion Ahead

Looking to fiscal 2026, Jacobs set guidance for its remaining business, including segments most related to AMTM's operations, projecting 6–10% adjusted net revenue growth and an adjusted EBITDA margin between 14.4% and 14.7%. While these figures do not precisely map onto AMTM as a pure-play, they reflect sector-level optimism and continued operational improvements. Free cash flow margin is forecast in the healthy range of 7.0% to 8.0%.

What This Means for Investors

While AMTM’s year was heavily impacted by the mechanical realities of its separation from Jacobs—most notably in discontinued operations and non-cash adjustments—the company enters its first full year on its own with stable backlog, strong cash flow generation, and a focus on sectors showing sustained demand. As integration challenges fade, investors and analysts may shift their focus to operational performance, capital deployment strategies, and market-specific opportunities in infrastructure and advanced facilities.

Bottom line: AMTM’s transitional results offer a baseline, but its outlook is grounded in robust sector tailwinds and clear room for operational improvement. Investors may want to monitor backlog growth, margin expansion, and capital allocation as signals of management’s ability to deliver in this new era.

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