- Safety Performance: Achieved a TRIR of 0.033 and 96% Zero Harm days in 2025, reflecting industry-leading safety outcomes.
- Backlog Growth: Year-end backlog reached $4.2 billion, a 5% increase YoY, driven by Sustainable Tech contracts for 2026.
- Spin-off Progress: On-track for a 2026 H2 distribution, with an SEC filing completed and an expected March 2026 amendment incorporating 2025 audited financials.
- Financial Results: FY 2025 adjusted EBITDA rose $100 million YoY to $100 million, with adjusted EPS at $3.93, and $413 million returned to shareholders.
- 2026 Guidance: Revenue projected at $7.9–$8.36 billion, adjusted EBITDA of $980M–$1.04B, and a $0.66/share dividend, reflecting disciplined growth and cash flow management.
Segment Performance
In Sustainable Tech, KBR delivered a strong book-to-bill in both the third and fourth quarters, exiting the year with solid work under contract for 2026. Backlog ended the year at $4.2 billion, up 5% year-over-year. In Mission Tech, revenue held up year-over-year, margins improved, and cash performance was excellent. The company secured positions on key multiple award contract vehicles and defended several important recompetes.
Outlook and Guidance
For 2026, KBR expects low double-digit growth in Sustainable Tech and low single-digit growth in Mission Tech. Capital expenditures are expected to be $40 million to $50 million for the year. The company returned a record $413 million to shareholders in 2025 and approved an annual dividend of $0.66 per share for 2026. KBR's effective tax rate for 2026 is expected to be 26% to 28%, higher than the current year.
Valuation
With a P/E Ratio of 13.06 and an EV/EBITDA of 8.1, KBR's valuation appears reasonable. The company's ROE of 28.41% and ROIC of 11.66% indicate strong profitability. The Dividend Yield is 1.56%, and the Free Cash Flow Yield is 9.03%. Analysts estimate next year's revenue growth at 3.7%, which is slightly below KBR's guided growth rate.
Strategic Progress
KBR's spin-off transaction remains on track, with a targeted distribution in the second half of 2026. The company has made a confidential filing with the SEC and expects to file an amendment incorporating full-year audited 2025 financials in March 2026. KBR is moving towards more fixed-price work and increasing its mix of recurring OpEx and digital solutions, with a growing focus on digital solutions driving long-term contracts and higher visibility of earnings and cash.
Future Prospects
The company reported several large contracts in protest, including a $1 billion Mission Iraq award and a classified program called K2A. KBR is taking a disciplined approach to AI, focusing on use case solutions driving ROI. The company's pipeline is strong, with a global business and significant opportunity across the globe and across its capability set.