Amentum’s Q2 results were met with a positive market reaction, as management credited the quarter’s performance to robust demand for its mission-focused engineering services and the successful execution of key divestitures. CEO John Heller emphasized the benefits of recent integration efforts and the strategic focus on advanced engineering and technology solutions. Notably, the company completed the sale of its Rapid Solutions and New Zealand maintenance businesses, sharpening its core business. Growth in Digital Solutions and strong contract wins, particularly in space operations and nuclear engineering, were central to the company’s momentum this quarter. Heller highlighted, “Our team's resilience and innovation have resulted in strong performance for the quarter and have enabled us to provide updated guidance, which reflects underlying organic increases.”
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Amentum (AMTM) Q2 CY2025 Highlights:
- Revenue: $3.56 billion vs analyst estimates of $3.51 billion (2% year-on-year growth, 1.5% beat)
- EPS (GAAP): $0.04 vs analyst expectations of $0.15 (73.3% miss)
- Adjusted EBITDA: $274 million vs analyst estimates of $268.6 million (7.7% margin, 2% beat)
- The company slightly lifted its revenue guidance for the full year to $14.08 billion at the midpoint from $14 billion
- EBITDA guidance for the full year is $1.08 billion at the midpoint, in line with analyst expectations
- Operating Margin: 3.3%, in line with the same quarter last year
- Backlog: $44.6 billion at quarter end
- Market Capitalization: $6.17 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Amentum’s Q2 Earnings Call
- Colin Canfield (Cantor): Asked about the impact of joint venture (JV) wins on the book-to-bill ratio and the outlook for space contracts. CFO Travis Johnson explained that including JV awards, the book-to-bill would have been 1.8, and CEO John Heller detailed the strategic importance of the Space Force and NASA pipelines for future growth.
- Henry Roberts (Truist): Questioned the effect of government budget “flush” and contracting officer shortages on procurement timing. CEO John Heller responded that the current administration is moving with urgency, and management expects a solid fourth quarter with awards proceeding as planned.
- Mariana Perez Mora (Bank of America): Inquired about the financial contribution and growth outlook for nuclear projects. CEO John Heller noted over $2 billion in nuclear business today with upside from regulatory changes, and CFO Travis Johnson confirmed that nuclear margins are accretive and expected to grow in line with market expansion.
- Noah Poponak (Goldman Sachs): Sought clarity on the relationship between backlog trends and future pipeline, as well as the sustainability of mid-single-digit organic growth. Johnson explained that JV wins do not always appear in backlog but drive future cash flow, and the company remains aligned with long-term industry trends.
- Ken Herbert (RBC Capital Markets): Asked about recompete risk and sustainability of Digital Solutions margins. Johnson noted only one major recompete in the next year, with contract duration providing revenue visibility. He and COO Steve Arnette highlighted that Digital Solutions margins should exceed 8% over time as digital offerings scale.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) resolution of the Space Force Range Contract protest and subsequent inclusion in backlog, (2) the pace of nuclear contract wins and project ramp-up in both the U.S. and Europe, and (3) continued margin improvement in Digital Solutions as integration deepens across the portfolio. Progress on these fronts will be key indicators of Amentum’s ability to capitalize on federal investment and global energy trends.
Amentum currently trades at $25, down from $25.32 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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