Amentum's third fiscal quarter arrived with the company executing on the operational promises the Jacobs Critical Mission Solutions merger was supposed to unlock, and slipping on the volume promise the same merger was supposed to deliver. GAAP revenue fell 2% to $3.49 billion; Adjusted EBITDA rose 6% to $290 million; GAAP diluted earnings per share jumped to $0.27 from $0.04 a year ago; Adjusted Diluted EPS rose 20% to $0.67. The mix is the story. Operating income climbed 67% to $172 million, gross margin held flat at roughly 10.3%, and Adjusted EBITDA margin expanded 60 basis points to 8.3% - the cleanest print in three quarters, driven by a favorable mix shift and cost discipline. Backlog reached $48.2 billion, up 8% year over year on 1.3x trailing-twelve-month book-to-bill, and free cash flow reached $135 million. The quarter also brought a $400 million-plus booking in global nuclear energy, a $974 million NASA Langley IDIQ win, and a $500 million NASA COSMOS joint-venture award - three of the largest individual awards disclosed anywhere in the defense-and-civil federal services market this year.
The volume side is the disappointment. Revenue declined because contracts that were once consolidated joint ventures are now unconsolidated equity-method investments, a structural change the company itself engineered as it reshapes how it participates on large programs. The transition flatters margins, lifts the equity earnings line, and depresses the top line - three things that happened simultaneously in the same quarter. Management responded with a revenue guide cut to $13.80–$13.95 billion from $13.95–$14.30 billion, alongside a raise in Adjusted EBITDA to $1.115–$1.140 billion from $1.100–$1.140 billion and a raise in Adjusted Diluted EPS to $2.40–$2.50 from $2.25–$2.45. A company raised profit guidance while cutting revenue guidance. The signal is that the merger synergy math is now bending the operating model toward higher-margin work and away from lower-margin consolidated volume. The market has so far refused to credit the trade: the shares trade at roughly $21.81, down about 9% from the $24 IPO level in September 2024, and off roughly 42% from the 52-week high of $37.53 touched in February.