Amentum Holdings (AMTM)·Q1 2026 Earnings Summary

Amentum Beats EPS But Revenue Miss Sends Stock Down 11%

February 10, 2026 · by Fintool AI Agent

Amentum Holdings reported Q1 FY2026 results that beat on the bottom line but missed on revenue, triggering a sharp selloff. Adjusted EPS of $0.54 topped the $0.52 consensus by 3.8%, extending the company's beat streak to at least four consecutive quarters. However, revenue of $3.24B came in 2.5% below the $3.32B consensus, with the 5% YoY decline attributed to structural headwinds from JV transitions, divestitures, and government shutdown impacts.

Despite maintaining full-year guidance and announcing nearly $1 billion in nuclear energy contract wins during Q1 alone, the stock dropped 11%—falling from $37.53 pre-earnings to $32.97 after the earnings call.

Did Amentum Beat Earnings?

*Values retrieved from S&P Global

The story: Amentum delivered its fourth consecutive EPS beat, driven by margin expansion (8.1% EBITDA margin, up 40bps YoY) and lower interest expense from debt repayments. The revenue miss, while optically concerning, was largely explained by known structural factors—JV transitions, divestitures, and the government shutdown created an approximately 8% headwind that was only partially offset by new contract ramp-ups.

The red flag for investors: free cash flow swung to a $142M outflow from a $102M inflow in the prior year, driven by an extra pay cycle and short-term collections timing issues from the government shutdown. Management emphasized this was purely timing—collections in Q2's first week were already $100M higher than the same period last year.

How Did the Stock React?

The market's reaction was swift and brutal:

This marks a stark contrast to Amentum's previous earnings reactions, which averaged double-digit gains over the prior three quarters (+11%, +2%, +18%). The stock had rallied from a 52-week low of $16.01 to a high of $38.11 just days before earnings, making it vulnerable to profit-taking on any disappointing results.

What likely drove the selloff:

1. Revenue miss even with known headwinds factored in
2. Significant FCF outflow vs prior year inflow
3. Elevated valuation (P/E ~132x) leaves little room for error
4. Profit-taking after 125%+ rally from 52-week lows

What Changed From Last Quarter?

The sequential revenue decline reflects normal seasonality (Q4 typically stronger) plus the full quarter impact of structural headwinds. The positive: EBITDA margins expanded meaningfully despite lower revenue, and funded backlog surged 23%—suggesting underlying operational improvement and resolution of prior administrative delays.

What Did Management Guide?

Amentum reaffirmed all FY2026 guidance, signaling confidence despite the Q1 miss:

*Implied growth after adjusting for divestitures, JV transitions, and working days (~$650M revenue, ~$32M EBITDA, ~$0.12 EPS, ~$25M FCF impact).

The guidance maintenance suggests management views Q1's cash flow weakness as timing-related rather than structural. The FCF guidance midpoint of $550M implies substantial acceleration over the remaining quarters.

Quarterly Run-Rate Bridge

Management provided a helpful bridge showing how Q1's $3.2B run-rate scales to achieve full-year guidance:

This implies Q2-Q4 average revenue of ~$3.6B per quarter, which would get Amentum to the low end of guidance ($13.95B). The path relies on: (1) no further government disruptions, (2) working day normalization (Q1 had 60 days vs. 63-64 in later quarters), and (3) continued contract ramp-ups.

Q&A Highlights: What Analysts Asked

The earnings call Q&A surfaced several key investor concerns and management responses:

On Free Cash Flow Recovery

Analyst (Colin, Cantor): How should we think about FCF progression and receivable factoring?

CFO Travis Johnson: "Collections in the first week of the second quarter were $100 million higher than they were in the first week of Q2 of last year. Roughly 25% of that to-go free cash flow we do expect in the second quarter. Q4, as it always has been, will be our strongest free cash flow quarter."

Key takeaway: The negative FCF was purely timing-related from an extra pay cycle and government holiday closures—not a structural issue.

On Nuclear Revenue Timeline

Analyst (Tobey, Truist): How does the nuclear pipeline fold into the P&L?

CEO John Heller: "The upfront work on a nuclear project is typically in the engineering, the governance, getting regulatory approvals, preparing for construction. And then the revenue on these projects accelerates quite a bit once you move into construction. That can take anywhere from 1-5 years to move into those stages. These are really 5-10-year projects... in terms of getting to the peak, it usually takes 2-5 years to see the peak revenue opportunity on nuclear."

Key takeaway: Investors expecting immediate revenue impact from nuclear wins need patience—peak contribution is 2-5 years out.

On Margin Improvement Sustainability

Analyst (Seth, J.P. Morgan): What drove the 80bp margin expansion in Global Engineering Solutions?

CFO Travis Johnson: "It wasn't really just one area. First, progress on our strategic objective to prioritize higher-margin work. You'll see in our 10-Q that we've got a higher percentage of fixed-price work. Also, some mixed benefits from the government shutdown with some lower-margin work impacted, continued benefits from our cost synergy initiatives, and strong program performance."

Key takeaway: Margin expansion is structural (contract mix shift to fixed-price) plus operational excellence—not just a one-time benefit.

On Funded Backlog Recovery

CFO Travis Johnson: "We had an uptick in funded backlog during the quarter... nearly $7 billion, a 23% increase from Q4. We're comfortable with funded backlog in that range of $5 billion-$7 billion."

Key takeaway: Funded backlog recovery addresses a key concern from prior quarters about administrative delays on contract funding.

On U.S. Nuclear Acceleration

CEO John Heller: "We are extremely busy... this administration is very supportive. It's all hands on deck, great relationship with the government and commercial business as well as foreign investment. The SMR development is really happening... 2026 is going to see some real progress, and that will create momentum into 2027 and beyond."

Key takeaway: Management sees U.S. nuclear as inflecting in 2026, driven by hyperscaler demand, SMR development, and administration support.

What's Driving the Business?

Segment Performance

Digital Solutions showed healthy growth driven by critical digital infrastructure and space systems contract ramp-ups. Underlying growth was 8% after normalizing for the Rapid Solutions divestiture.

Global Engineering Solutions bore the brunt of structural headwinds—JV transitions, a divestiture, and government shutdown impacts. However, EBITDA margins expanded 80bps to 8.4%, driven by higher fixed-price contract mix, cost synergies, and strong program execution.

Q1 FY2026 Contract Wins Highlight Nuclear Momentum

The quarter featured several transformational contract wins, particularly in nuclear energy—nearly $1 billion in nuclear awards alone:

• Rolls-Royce SMR Partnership — Selected as global program delivery partner for small modular reactors in UK and Czech Republic
• EDF Nuclear ($730M) — 10-year professional services for UK power stations
• Dutch Nuclear ($207M) — 5-year program management for Netherlands nuclear build
• USAF RPA ($995M ceiling) — 6-year unmanned aircraft sustainment
• DISA Compute-as-a-Service ($120M) — 5-year scalable computing contract
• Foreign Military Surveillance ($270M) — 3-year C5ISR solutions

The backlog grew to over $47B with a 1.0x quarterly book-to-bill (1.1x LTM, 1.3x imputed including JV awards), supporting the FY2026 guidance.

Accelerating Growth Markets

Management highlighted three "accelerating growth markets" where Amentum sees the strongest tailwinds:

Space Market Deep Dive: CEO Heller provided an extensive framework for the ~$90B space market projected to grow ~9% annually over five years:

• Satellites: Shift to proliferated LEO constellations increasing integration and lifecycle complexity
• Launch: Higher cadence from reusable vehicles driving operational demands across integration, safety, sustainment
• SATCOM: Expanding as foundational layer of global connectivity with multi-orbit architectures
• Integrated Systems: More software-defined, virtualized, cloud-integrated—raising importance of cybersecurity and automation

Artemis II Update: Amentum's COO Steve Arnette noted the historic crewed lunar mission is now slated for the March launch window, with Amentum supporting NASA at Kennedy Space Center for mission preparation.

What Management Said

CEO John Heller struck an optimistic tone despite the mixed results:

"While the longest government shutdown in history impacted performance in the quarter, I am especially proud of our teams around the world who remain focused, delivering exceptional outcomes for our customers and results largely in line with our expectations. Bottom line, Amentum continues to deliver."

On the nuclear renaissance and hyperscaler-driven demand:

"The demand that is there from the hyperscalers and the whole community understanding that energy and meeting the energy needs of our industry is a national security issue. So it's all hands on deck, great relationship with the government and commercial business as well as foreign investment... call it the second nuclear renaissance."

CFO Travis Johnson on strategic positioning:

"Achieving our target net leverage of less than 3 times by the end of the fiscal year remains a priority. In looking into fiscal year 2027 and beyond, we will remain disciplined in our approach, maintaining a prudent capital structure that enables flexible and opportunistic deployment."

The emphasis on nuclear energy, space, and digital infrastructure as "accelerating growth markets" signals where management sees the company's future, with repeated references to demand durability and long-cycle contracts.

Balance Sheet & Capital Position

A notable positive: Moody's upgraded Amentum's credit rating during the quarter, which CFO Johnson noted "immediately reduces interest expense in our term loan B by 25 basis points" and positions the company for "enhanced financial flexibility and market access." Management expects to achieve net leverage below 3x by fiscal year-end.

The 23% increase in funded backlog to nearly $7B was a key highlight, addressing investor concerns about administrative delays on contract funding from prior quarters.

Historical Beat/Miss Trend

*Q3 FY25 revenue estimate anomaly in data source

Amentum has now beaten EPS estimates in all four quarters since the Jacobs CMS merger, but this was the first revenue miss—and the market punished it with a 12% decline.

Forward Catalysts to Watch

1. Artemis II Launch (March 2026) — Historic crewed lunar mission with Amentum supporting NASA at Kennedy Space Center
2. Nuclear Pipeline Progress — Rolls-Royce SMR, EDF ($730M), and Dutch ($207M) contracts entering execution
3. COSMOS Contract Resolution — NASA award still under protest awaiting corrective action
4. Net Leverage < 3x Target — Expected by fiscal year-end, would increase capital deployment flexibility
5. Golden Dome/SHIELD Awards — Positioned on $151B SHIELD IDIQ, awaiting initial procurements
6. $23B Pending Awards — Majority are new business to Amentum, including $2B in protest/corrective action

The Bottom Line

Amentum's Q1 FY2026 was a tale of two metrics: continued EPS outperformance driven by margin expansion and lower interest costs, offset by a revenue miss and FCF weakness that spooked investors. The 12% total decline after the earnings call appears to reflect:

• Elevated expectations after a massive rally from 52-week lows
• Sensitivity to any signs of execution risk given elevated valuation
• Concerns about FCF sustainability (despite management's strong rebuttal)

However, several positives emerged from the earnings call that the market may not be fully appreciating:

• FCF recovery is real: Collections already $100M higher in first week of Q2 vs prior year
• Funded backlog up 23%: Addresses prior concerns about administrative delays
• Nuclear momentum accelerating: $1B in Q1 awards alone, with U.S. market now inflecting
• Contract mix improving: Shift toward higher fixed-price work supporting structural margin expansion
• Artemis II in March: High-profile execution opportunity at Kennedy Space Center

For investors with a longer time horizon, the selloff may present an opportunity—management's confidence in the nuclear "second renaissance" and space positioning is well-supported by specific contract wins and pipeline visibility. The key risk is timing: nuclear project peak revenue is 2-5 years out, and investors may not be patient enough to wait.

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Analysis based on Amentum Q1 FY2026 earnings call transcript (February 10, 2026), 8-K filing (February 9, 2026), and consensus estimates from S&P Global.