KBR Inc. Q4 and Fiscal 2025 Earnings: Revenue Hits $7.8B

KBR reported Q4 FY2025 adjusted EPS of $0.99, beating the consensus estimate of $0.95 by $0.04 (a 4.2% positive surprise). Q4 revenue of $1.89 billion missed estimates of $1.91 billion by 1.6%. Full-year revenue reached $7.8 billion (+1% YoY), with adjusted EPS of $3.93 (+18% YoY). Shares rose approximately 5% in pre-market trading to $42.85 following the announcement.

About KBR, Inc.

KBR, Inc. (NYSE: KBR) is a global provider of science, technology, and engineering solutions serving governments and commercial customers across more than 85 countries. Headquartered in Houston, Texas, the company traces its roots to 1901 when Morris Woodruff Kellogg founded The M.W. Kellogg Company, later merging with Brown & Root (founded 1919) under Halliburton before becoming an independent public company in 2006.

KBR operates through two primary segments: Mission Technology Solutions (MTS), serving defense, intelligence, space, and government clients, and Sustainable Technology Solutions (STS), delivering proprietary process technologies and engineering services for energy, chemicals, and industrial sectors. As of the most recent data, KBR carries a market capitalization of approximately $5.19 billion, a P/E ratio of 14.05, a dividend yield of 1.6%, and employs approximately 36,000 people worldwide. The company’s return on equity stands at 35.14%, with a debt-to-equity ratio of 1.74 and a beta of 0.51.

Top Financial Highlights

1. Q4 revenue totaled $1.89 billion, reflecting an 11% year over year decline or a reduction of $223 million, primarily due to a slower contract award pace and contingency EUCOM scope reductions.
2. Q4 net income increased to $111 million, up 46% year over year, supported by higher operating income and reduced interest expense.
3. Q4 diluted EPS reached $0.87 on a GAAP basis, rising 53% year over year, while adjusted EPS stood at $0.99, up 10% year over year.
4. Q4 adjusted EBITDA amounted to $238 million, representing a 5% increase year over year, with margin expanding to 12.6%, an improvement of 190 basis points.
5. Q4 operating income rose to $191 million, up 36% year over year, delivering a 10.1% operating margin.
6. Full year revenue reached $7.8 billion, reflecting a 1% increase year over year, indicating stable top line performance.
7. Full year net income totaled $415 million, rising 11% compared to the prior year.
8. Full year adjusted EPS increased to $3.93, up 18% year over year, representing a $0.60 improvement.
9. Full year adjusted EBITDA reached $968 million, up 12% year over year, with margin expanding to 12.4%, reflecting more than 100 basis points of improvement.
10. Full year operating cash flow was $557 million, achieving 110% conversion to adjusted net income and exceeding the company’s guidance range.
11. In Q4, the MTS segment generated revenue of $1.3 billion, down 14%, while adjusted EBITDA increased 4% to $145 million, resulting in an 11.2% margin with a 198 basis point expansion. Backlog and options totaled $19.1 billion, up 15% year over year.
12. The STS segment reported Q4 revenue of $590 million, down 2%, with adjusted EBITDA rising 3% to $121 million, delivering a 20.5% margin and a 101 basis point increase. Backlog stood at $4.2 billion, up 5%, with a book to bill ratio of 1.6x.
13. Total liquidity was approximately $1.1 billion, including $605 million available under a revolving credit facility and $500 million in cash.
14. A record $413 million was returned to shareholders in FY2025 through dividends and share repurchases. A quarterly dividend of $0.165 per share, equivalent to $0.66 annualized, has been approved for 2026.
15. FY2026 guidance includes projected revenue between $7.90 billion and $8.36 billion, adjusted EBITDA between $980 million and $1.04 billion, adjusted EPS between $3.87 and $4.22, and adjusted operating cash flow between $560 million and $600 million.

Beat or Miss?

KBR beat on profitability and cash flow while modestly missing on the top line. The earnings beat continues a historical trend for KBR of surpassing EPS estimates, while the revenue miss reflects near-term headwinds from award timing and EUCOM contingency scope reductions rather than structural weakness.

What Leadership Is Saying?

Fiscal 2025 was a year of disciplined execution for KBR as our teams delivered strong operational and financial performance despite a challenging award environment. We expanded margins, generated robust cash flow, and grew backlog and options while continuing to advance our strategy toward higher-value, technology-enabled, and recurring work. Importantly, we also made meaningful progress on the planned spin-off, sharpening the strategic focus of each business and positioning both companies for long-term value creation.” By Stuart Bradie, President and Chief Executive Officer

Revenues were approximately $7.8 billion, up modestly year-over-year, despite the market volatility. We delivered strong performance in defense and intelligence programs… Adjusted EBITDA increased $100 million, and full-year margins were 12.4%, up more than 100 basis points year-over-year. Cash was a key highlight. Operating cash flow was $557 million, representing 110% conversion to adjusted net income. Overall, revenues and adjusted EBITDA were within our ranges for the year; adjusted EPS and operating cash flow exceeded the top end of our guided ranges. By Chad Strickland, Chief Financial Officer

Historical Performance

KBR Q4 FY2025 vs. Q4 FY2024

Despite an 11% revenue decline in Q4, KBR significantly improved profitability across all key earnings metrics. Net income nearly doubled, adjusted EBITDA margins expanded by 190 basis points, and full-year operating cash flow rose over 20%. This reflects a deliberate strategic shift toward higher-margin, technology-enabled work and away from lower-margin EUCOM contingency volumes.

Competitor Comparison

Latest Quarterly Performance

Among its peer group, KBR stands out for its strong margin expansion despite a revenue decline, while Jacobs Solutions showed the strongest revenue growth at 6.6%. Fluor faced the most challenging quarter with a full-year GAAP net loss, and AECOM delivered the highest margins but saw EPS decline. KBR’s discipline in pursuing higher-quality earnings distinguishes its performance in a mixed environment for engineering and construction companies.

How the Market Reacted?

Following the release of Q4 and fiscal 2025 results on February 26, 2026, KBR shares rose approximately 5% in pre-market trading to $42.85, up from the prior close of $40.81. The positive reaction came despite the revenue miss, as investors focused on the EPS beat, strong cash flow generation, and improved margins.

The stock had been trading near its 52-week low of $39.39, and with a P/E ratio of approximately 12.9, multiple analysts flagged KBR as undervalued relative to its earnings growth profile. However, the stock closed at $42.23 on February 27, settling at a 1-week change of +0.45%, suggesting measured optimism tempered by a mixed FY2026 guidance outlook where the revenue range straddles consensus expectations.