Total Revenue

FY 2025

$7.0B - $7.5B " "

$6,480,000,000 - $6,680,000,000 "

lowered

Adjusted EBITDA

FY 2025

$640M - $710M " "

$595,000,000 - $635,000,000 "

lowered

Operating Cash Flow

FY 2025

$420M - $480M "

$400,000,000 - $440,000,000 "

lowered

Capital Expenditures

FY 2025

no prior guidance

1% of annual revenue "

no prior guidance

Robust Order Pipeline and Strong Backlog

Q1 earnings call highlighted a $55 billion pipeline, a record backlog of $9.1 billion with 69% funded, and approximately $12 billion of unbooked contract wins. " " "

Q2 earnings call reported a nearly $9 billion total backlog with 70% funded, a $55 billion pipeline including detailed counts of large opportunities, along with an emphasis on the robust pipeline supporting continued growth. " " "

Consistently positive; both periods emphasize strong order flow and backlog with minor numerical shifts, reinforcing the company’s growth prospects. " "

Federal Contract Opportunities and Initiatives

Q1 discussion focused on several significant federal wins, a robust $55 billion pipeline, and key contract awards in the cyber and intelligence markets. " " "

Q2 call expanded the discussion with detailed federal opportunities including major initiatives like FAA Integration and Golden Dome, while reiterating the robust pipeline and contract wins. " "

Increased emphasis; while both periods focus on Federal opportunities, Q2 provides additional details on high-value initiatives, enhancing the strategic message. " "

Emerging High-Value Federal Initiatives

Q1 earnings mentioned FAA Integration with a $15 billion FAA modernization allocation and Golden Dome with $25 billion funding, positioning them as emerging opportunities. " "

Q2 earnings provided a deeper dive into both initiatives by stressing the FAA integration contract with IBM partnership and the Golden Dome initiative with advanced engineering capabilities. " "

Evolving positively; the initiatives remain promising with Q2 adding more granular details and stronger strategic positioning. " "

Favorable Federal Budget Tailwinds

Q1 called out alignment with the new administration’s national security priorities, with an implicit nod to favorable budget tailwinds. " " "

Q2 emphasized a shift toward hard infrastructure spending (roads, bridges, airports), referencing the Surface Transportation Reauthorization Bill and reconciliation bill details, suggesting continued support from federal budgets. " "

Slightly shifted focus; while both periods benefit from federal funding, Q2 shifts the narrative toward hard infrastructure spending, reinforcing near-term optimism. " "

Margin Dynamics in Federal Solutions

Q1 highlighted margin pressure from a shift toward cost-type contracts and reduced confidential contract volume, with expectations for full-year margins to recover to about 9.5%. " "

Q2 noted further margin pressure with the adjusted EBITDA margin dropping 210 basis points to 8.3% due to lower volume on a confidential contract and increased investments, while outlining a recovery in the second half driven by incentive fees and product sales. " "

Cautiously negative in the current period; although both periods report margin pressures, Q2 shows a deeper impact while still anticipating eventual recovery. " "

Contract Award Timing Uncertainty and Execution Risks

Q1 did not explicitly discuss contract award timing uncertainty, with only brief mentions of procurement activity and proposals totaling over $3 billion. "

Q2 earnings acknowledged a slower contracting environment affecting Federal Solutions growth in H2, though many projects were already awarded, indicating cautious optimism amid execution risks. "

New focus; this topic emerged in Q2, highlighting uncertainties in award timing despite a solid base of awarded projects. " "

Dependence on Confidential Contracts

Q1 discussion noted reduced volume on the confidential contract (operating at about 80% of normal) due to a pause from an executive order, with expectations for a ramp-up later, and significant impact on revenue performance. " " "

Q2 reported that the confidential contract generated expected revenue in Q2 but was terminated for convenience at the start of Q3, with mitigation strategies in place through $11 billion of awarded but unbooked contracts. " "

Shifting from reliance to mitigation; the sentiment moved from anticipation of a ramp-up in Q1 to managing termination in Q2, reducing future dependence on this contract. " "

Strategic Acquisitions and Diversification

Q1 detailed the acquisition of TRS Group ($37 million) and plans for 2–3 acquisitions in 2025, along with a balanced portfolio across six end markets, emphasizing diversification and a synergistic national security/infrastructure portfolio. " " "

Q2 discussed the completed acquisition of Chesapeake Technology International (CTI) in the strategic national security space, along with continued acquisitions and a diversified portfolio driving mid- to high-single digit organic growth. " " "

Consistent and evolving; both periods underscore strategic acquisitions and diversification, with each call highlighting new deal achievements that reinforce long-term growth. " "