KBR (KBR) Q1 2026 earnings summary

Executive summary

• Revenues declined 5% year-over-year to $1.92 billion, mainly due to the expected runoff of EUCOM contingency work in the Mission Technology Solutions (MTS) segment.

• Net income attributable to shareholders was $102 million, a 12% decrease from the prior year quarter.

• Adjusted EBITDA rose 1% to $251 million, with margin expanding to 13.1% from 12.3%.

• Demand in core markets remains durable, with high contract coverage for 2026 revenue guidance: 67% for Sustainable Tech and 91% for Mission Tech.

• Advancing the planned spin-off of MTS, targeting a January 4, 2027, completion.

Financial highlights

• 1Q'26 revenues were $1.92 billion, down from $2.02 billion in 1Q'25, primarily due to EUCOM contingency scope reductions.

• Adjusted EBITDA increased by $3 million year-over-year, with margin expanding to 13.1% from 12.3%.

• Adjusted EPS was $0.96, down $0.05 year-over-year, primarily due to higher financing expenses.

• Adjusted operating cash flow was $119 million, up $28 million year-over-year, with 98% OCF conversion.

• Cash and cash equivalents at quarter-end were $380 million.

Outlook and guidance

• Fiscal 2026 guidance reaffirmed: revenues of $7.90–$8.36 billion, adjusted EBITDA of $980M–$1.04B, adjusted EPS of $3.87–$4.22, and adjusted operating cash flows of $560M–$600M.

• 82% of FY 2026 revenue guidance is under contract, with 67% for Sustainable Tech and 91% for Mission Tech.

• Sustainable Tech expected to deliver mid-teens year-over-year revenue growth.

• Revenue phasing: 47% in H1, 53% in H2, with second-half growth in Sustainable Tech.

• No changes to adjusted EBITDA, EPS, or OCF guidance; some Q2 OCF volatility possible due to Middle East conflict resolution.