KBR : Q1 2026 KBR, Inc. Earnings Conference Call Presentation

Published: 2026-05-05 09:47:11 ET KBR

Published on 05/05/2026 at 09:47 am EDT

May 5, 2026

Stuart Bradie, President and CEO

Shad Evans, Executive VP and CFO

Rachael Goldwait, VP of Investor Relations

President and CEO

Employee-built platform for news, safety updates and resources

Reaches remote and non-desk teams

globally

Critical communication channel during the Middle East conflict

Supports Zero Harm through clear, timely and trusted communication

Delivering Solutions, Changing the World.® 4

Strong start to the year, with disciplined execution and resilient operations

Continued demand in core markets, supported by clear pipeline visibility

Spin transaction advancing as planned, sharpening strategic focus and positioning

FY 2026 guidance reaffirmed, with continued focus on execution and cash generation

Delivering Solutions, Changing the World.® 5

Sustainable Tech: Bookings Driven by Energy Security and Reliability

1Q Award Highlights Growth Drivers KPIs that Matter

Extended downstream and project management presence through a new refinery services award in Libya

Deepened lifecycle services engagement with a

long-standing customer supporting petrochemical expansion in Saudi Arabia

Secured 10-year recurring revenue through a global catalyst supply agreement

Advanced digital and AI strategy with a strategic investment in Applied Computing

Continued investment in global energy and infrastructure driven by demand growth and energy security priorities

Increasing mix of recurring OPEX and digital solutions, enhancing revenue durability

Scaling emerging technologies portfolio with attractive long-term growth

Expansion into new geographies, leveraging established customer relationships and local partnerships

1.2x QTD book-to-bill1 (1.2x TTM) reflecting sustained award momentum

$4.7B backlog (+9% YoY), supporting strong forward revenue visibility

>$5B near term pipeline (ex LNG) with >80% from existing customers

~67% under contract to deliver FY26 Revenues guide midpoint

1 Book-to-Bill (BTB) excludes the Plaquemines LNG project.

Delivering Solutions, Changing the World.® 6

What's Driving Near-term Demand Profile:

Diversified opportunity base across multiple critical programs

Early-phase, engineering-driven work progressing through defined project stages

Significant 1Q'26 Bookings

Near-term Pipeline Opportunities

Near-term pipeline opportunity boxes indicate relative low, medium, and high levels based on current visibility; not indicative of future results.

Delivering Solutions, Changing the World.® 7

Mission Tech: Bookings Reflect Core Digital and Mission-Critical Priorities

1Q Award Highlights Growth Drivers KPIs that Matter

Secured digital engineering and analytics work across defense and space through

U.S. Space Force

Secured mission-critical data and analytics access through a five-year DoW contract vehicle

Extended durable civilian partnerships through a recompete with the DOT's Volpe Center

Continued mission-critical readiness and sustainment support for U.S. military customers under LOGCAP and AFCAP

Alignment with the most critical national security priorities globally

Higher-value,

technology-driven, integrated solutions with a clear profitability-first mindset

Leveraging contract vehicles more effectively to deliver speed and accelerate growth

Driving modernization and innovation through deeper cross-business synergies across global customers

1.0x QTD book-to-bill1 (1.0x TTM) reflecting award cadence timing

$18.5B backlog & options, with 39% funded backlog (excluding PFIs)

$16B awaiting award

$2.6B wins in protest

>$25B+ new business bid volume expected in FY26

~91% under contract to deliver FY26 Revenues guide midpoint

1 Book-to-Bill (BTB) excludes long-term UK PFIs.

Delivering Solutions, Changing the World.® 8

What's Driving Near-term Demand Profile:

Enduring mission priorities drive sustained customer activity

Technology-led program design embeds data and AI into the mission

Significant 1Q'26 Bookings

Near-term Pipeline Opportunities

Near-term pipeline opportunity boxes indicate relative low, medium, and high levels based on current visibility; not indicative of future results.

Delivering Solutions, Changing the World.® 9

Quarter-end timing to de-risk execution: Planning toward a January 4, 2027 spin (first business day of fiscal 2027)

Regulatory process advancing: Form 10 confidentially resubmitted with FY25 financials; public filing anticipated in September

Tax-free transaction framework: IRS private letter ruling process progressing

Leadership readiness well advanced: CEO search nearing completion; CFO process to follow shortly thereafter

Operational separation underway: IT stand-up execution in progress; real estate and legal entity rationalization advancing

Standalone strategies taking shape: Two Investor Days planned for the second week of November

Delivering Solutions, Changing the World.® 10

Executive VP and CFO

Revenues

-95M

Adj. EBITDA1

+3M

Adj. EPS1

-0.05

Adj. OCF1

+28M

$1,940

excl. EUCOM contingency

12.3%

13.1%

Decrease driven primarily by EUCOM contingency scope reductions ($78M headwind)

Increase reflects strong project execution, mix of services across the portfolio and prudent cost management

Decrease reflects higher interest expense from unconsolidated joint ventures, partially offset by lower outstanding shares due to open market repurchases

Adj. OCF conversion1 98%

Disciplined working capital management; consolidated DSO of 65 days

1 See Appendix for reconciliation of non-GAAP financial measures Adj. EBITDA, Adj. EPS and Adj. OCF to the nearest GAAP measures. Adj. EBITDA margin calculated as Adj. EBITDA / Revenues. Adj. OCF conversion calculated as (Adj. OCF / Adjusted diluted share count) / Adj. EPS.

Delivering Solutions, Changing the World.® 12

Sustainable Tech Mission Tech

Revenues

-10M

Adj. EBITDA1

+2M

Revenues

-85M

-7M (excl. contingency)

Adj. EBITDA1

-1M

21.2% 21.9%

$1,303

excl. EUCOM contingency

10.1% 10.6%

16.8%

Excl. LNG2

16.1%

Excl. LNG2

Largely in line with prior year, reflecting recent awards that have not yet contributed materially to revenues

Margin expansion driven by equity earnings from an LNG project; underlying margins remained stable

Excluding EUCOM contingency, growth in U.S. and Australian defense programs was offset by award and protest delays and funding restrictions at NASA

Margin expansion driven by

roll-off of lower-margin EUCOM work, disciplined execution and mix shift toward higher-value offerings

1 See Appendix for reconciliation of non-GAAP financial measure Adj. EBITDA to the nearest GAAP measure. Adj. EBITDA margin calculated as Adj. EBITDA / Revenues.

2 Adj. EBITDA margin excluding the Plaquemines LNG project.

Delivering Solutions, Changing the World.® 13

Margin tiers are illustrative groupings of STS offerings by average 2026E Adj. EBITDA margin. Weighted margin reflects a blended 2026E STS Adj. EBITDA margin based on relative revenue mix, inclusive of unconsolidated JV equity earnings.

Delivering Solutions, Changing the World.® 14

Organic Growth

Invest in innovation, digital

solutions and engineering

Strategic M&A

Disciplined approach to

accretive, strategic bolt-on acquisitions

Prudent Leverage

Maintain leverage at 2.5x or

below

Return Capital to Shareholders

Continue share repurchases and maintain an attractive dividend

Liquidity and Leverage

Net debt

TTM Adj. EBITDA1

2,222

971

Net debt / TTM Adj. EBITDA1

2.3x

Balanced Capital Allocation Priorities

Free Cash Flow

Operating cash flows

110

Adj. operating cash flows1

119

Capital expenditures

Return of Capital

Share repurchases

Dividends

Available share repurchase program

427

1 See Appendix for reconciliations of non-GAAP financial measure Adj. EBITDA and Adj. OCF to the nearest GAAP measures. Refer to Supplemental Financial Information for trailing twelve months (TTM) Adj. EBITDA.

Delivering Solutions, Changing the World.® 15

Financial Modeling Assumptions

Capex: ~$40M - $50M

Effective tax rate: 26% - 28%

Depreciation & amortization: ~$165M (includes ~$45M

purchased intangibles amortization)

Adjusted diluted share count: ~127M

82% Work Under Contract | 1% Recompete | 17% New Business

STS: 67% Under Contract | MTS: 91% Under Contract

FY 2026 Guidance

Revenues

$7.90B - $8.36B

Adj. EBITDA1

$980M - $1,040M

Adj. EPS1

$3.87 - $4.22

Adj. Operating

Cash Flows1

$560M - $600M

1 The company does not provide reconciliations of Adj. EBITDA, Adj. EPS, and Adj. OCF to the most comparable GAAP financial measures on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, and acquisition-related expenses without unreasonable effort, which could be material to the company's results computed in accordance with GAAP.

Delivering Solutions, Changing the World.® 16

Strong start to the year, driven by disciplined execution with continued focus on margins and cash

Durable demand with growing visibility, with 67% of STS and 91% of MTS FY 2026 revenue guidance covered by work under contract

Spin transaction advancing as planned, with key milestones on track toward a spin effective date of January 4, 2027

FY 2026 guidance reaffirmed, with continued commitment to execution, margin discipline and strong cash generation

Delivering Solutions, Changing the World.® 17

Multi-year transformation into a leading provider of differentiated, innovative, up-market

science, technology, and engineering solutions with large scale, global reach

Serving diverse, attractive end markets aligned with secular growth trends including global security, sustainability, and digitalization

Top talent combining deep domain expertise, proprietary technologies, and an unwavering focus on execution, with a specialization in complex, mission critical work

Excellent partners operating in dynamic teams to solve our customers' most complex challenges, which has resulted in recurring, long-term engagements and $23.2B in backlog and options1

Diversification, low capital intensity, and disciplined capital allocation generate stable, predictable cash flows and long-term shareholder returns, with growth and margin expansion plans in flight

1 Backlog and options as of quarter ended April 3, 2026.

Delivering Solutions, Changing the World.® 19

Disclaimer

KBR Inc. published this content on May 05, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 05, 2026 at 13:46 UTC.