KBR reported a strong performance in the first quarter of 2025, with double-digit growth in both revenue and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA.
Q1 2025 Financial Highlights
The aerospace and defense company said Tuesday it gained revenue of $2.1 billion, up 13 percent compared to the prior year. The adjusted EBITDA reached $243 million, marking a 17 percent year-over-year growth, with a margin of 11.8 percent, an increase of 40 basis points from last year. The adjusted earnings per share, or EPS, also climbed by 27 percent to $0.98. This surpassed the adjusted EBITDA growth rate, mainly caused by a lower share count on repurchases over the last year.
In addition, the below-the-line items were flat year-over-year, resulting in increased operating profit, which contributed to EPS growth. The operating cash flow reached $98 million, up by 8 percent from last year.
The increase in revenue is driven by growth in both the Mission Technology Solutions and Sustainable Technology Solutions segments. MTS revenues climbed to $1.5 billion, an increase of 14 percent compared to the prior year. The adjusted EBITDA was $145 million, up 11 percent, while margins slightly dipped to 9.6 percent. The Defense and Intelligence business unit generated a 22 percent growth while the Readiness and Sustainment business rose by 10%. The Science & Space and International business units were steady.
STS revenues were $550 million, up 12 percent, while the adjusted EBITDA was $124 million, up 20 percent. The EBITDA margins were 22.5 percent, an increase of 160 basis points over last year. The Brown & Root joint venture with an annual revenue of approximately $1.4 billion, is also a major contributor to STS’ revenue growth.
The strong financial performance showcased in the first quarter reaffirms KBR’s financial outlook for 2025.
Key Factors Behind Revenue Growth
The partnership between HomeSafe Alliance, a joint venture led by KBR, and the Transportation Command is one of the major contributors to the company’s gains. KBR also partnered with Venture Global on the Plaquemines LNG project and with Energy Transfer, which is working with MidOcean on the Lake Charles LNG project. KBR reports that both projects are progressing well.
The company also secured several contracts with the Department of Defense, including a seven-year $176 million ASTRO contract awarded by the Air Force Research Laboratory, which enhances the company’s existing support operations at the Mary Space Surveillance complex in Hawaii, an $85 million contract with Air Force for airfield repair kits and a $229 million contract with the Army for cargo helicopter systems.
The acquisition of LinQuest also played a major role in KBR’s revenue gains. Since its acquisition in the third quarter of 2024, LinQuest has secured the Ascent 2 award from the U.S. Space Force. The contract is a $970 million single-award IDIQ, which is expected to be completed in 2035.
Stuart Bradie on KBR’s Q1 Performance
“We delivered strong financial performance in the first quarter with double-digit revenue and EBITDA growth,” said Stuart Bradie, president and CEO of KBR.
“We have a balanced and resilient business portfolio offering multiple pathways to growth. We are preparing proactively amid macro uncertainty. We are controlling the controllable, being prudent on cost and remaining agile. We are maintaining a disciplined approach to capital allocation, acting on our share buyback authorization and returning capital to shareholders,” Bradie continued.