- Adjusted EPS rose 9 percent to $0.99, while operating income fell 11 percent on one-time costs tied to the planned MTS spinoff
- Backlog and options stood at $23 billion
- The MTS segment saw revenue slip 2 percent on the runoff of European Command contingency work
KBR has posted second-quarter 2026 revenue of $2 billion, a 2 percent increase over the same period last year. Adjusted earnings per share reached $0.99, up 9 percent, the company said Thursday.
Operating income fell 11 percent to $172 million, a decline KBR attributed to one-time costs related to the planned separation of its mission technology solutions,or MTS, business. Net income attributable to KBR climbed 32 percent to $96 million. Adjusted EBITDA came to $258 million at a 13 percent margin.
Backlog and options stood at $23 billion at quarter’s end. Book-to-bill was 1.1x.
How Did Mission Technology Solutions Perform?
Revenue at the MTS segment slipped 2 percent to $1.3 billion. KBR pointed to the expected runoff of contingency work supporting U.S. European Command. Executives said on the Q2 earnings call that segment revenue grew roughly $31 million, or 2 percent, excluding that activity. Growth came from international government clients, particularly in Australia and the United Kingdom, while U.S. federal civilian work declined.
Adjusted EBITDA for the segment reached $158 million, up 16 percent, with margin widening to 12.1 percent from 10.2 percent. KBR credited portfolio mix, cost management and contract closeouts. Backlog and options totaled $17.5 billion against a book-to-bill of 0.8x.
What Is Holding Up KBR’s Government Backlog?
Roughly $10.6 billion in awarded work sits under protest and does not appear in reported backlog or book-to-bill. The 20-year, $8 billion National Science Foundation’s Antarctic Science and Engineering Support Contract accounts for most of it. Executives said on the earnings call that a State Department award in Iraq and a classified logistics award are also affected by the protests.
KBR expects the work to convert to backlog as the protests resolve.
What Government Awards Did KBR Announce?
The company noted that Space Force awarded it a five-year, $95 million cost-plus-fixed-fee contract for digital engineering and enterprise decision support at Kirtland Air Force Base. KBR also took a position on Advisory Support and Technical Requirement Administration, a multiple-award IDIQ with an $866 million ceiling covering advisory and technical services for the Air Force, the Department of War and the intelligence community over five years.
Where Does the Trinzic Spinoff Stand?
KBR unveiled Trinzic on Thursday as the new name for the MTS business once it separates. The company is targeting completion on Jan. 4, 2027, the first business day of fiscal 2027, and intends the transaction to be tax-free for federal income tax purposes.
Michael LaRouche, a three-time Wash100 Award winner, will serve as president and CEO of Trinzic. Nicholas Veasey takes the chief financial officer role. Both appointments were announced in June.
KBR reaffirmed full-year guidance of $7.90 billion to $8.36 billion in revenue, adjusted EBITDA between $980 million and $1.04 billion, and adjusted earnings per share of $3.87 to $4.22.
