Amentum Holdings, Inc. (AMTM) shares jumped more than 22% on Tuesday after the defense and engineering contractor delivered a knockout quarter that exceeded Wall Street's expectations on both the top and bottom lines.
The company reported fourth-quarter adjusted earnings of 63 cents per share, comfortably ahead of the 59-cent analyst consensus. Quarterly sales came in at $3.925 billion, representing a massive 77% year-over-year increase and well above the Street's $3.613 billion estimate.
On a pro forma basis, which includes results from the CMS acquisition prepared according to Regulation S-X requirements, revenues climbed 10% in the fourth quarter. The company's Digital Solutions segment posted 11% revenue growth, while Global Engineering Solutions expanded 9%.
Profitability Metrics Show Strength
Operating income surged 400% to $135 million during the quarter, a dramatic improvement that caught investor attention. Adjusted EBITDA increased 8% to $300 million, though the adjusted EBITDA margin slipped 10 basis points to 7.7%.
On the cash flow front, Amentum generated $270 million from operating activities during the three months ended October 3, 2025. The company used $8 million in investing activities and $559 million in financing activities during the same period. As of quarter-end, Amentum held $437 million in cash and cash equivalents against $4.0 billion of gross debt.
Backlog Growth Signals Future Revenue
Perhaps the most encouraging metric for investors: Amentum's total backlog reached $47.1 billion, up from $45.0 billion a year earlier. That 5% increase reflected $16.5 billion in net bookings and a healthy book-to-bill ratio of 1.2x, indicating the company is winning work faster than it's completing existing contracts. Funded backlog stood at $5.6 billion as of October 3, 2025.
Major Air Force Contract Win
Earlier this month, Amentum secured a significant defense contract when the Air Force Air Combat Command awarded the company the Remotely Piloted Aircraft (RPA) Maintenance Support IDIQ contract. The deal carries a ceiling value of up to $995 million.
The contract focuses on maintaining the MQ-9 Reaper, an unmanned aerial system equipped with advanced sensors, armaments, ground control stations, and satellite communications. These unmanned systems have become essential to modern warfare and maintaining U.S. military superiority.
Looking Ahead
For 2026, Amentum guided revenue between $13.95 billion and $14.30 billion, closely aligned with the analyst consensus estimate of $14.08 billion. The outlook suggests management expects continued steady growth as the company integrates acquisitions and executes on its expanding backlog.
AMTM shares were trading up 22.7% to $31.13 at last check on Tuesday.
