Thank you all for being here. Good morning, and welcome to Amentum's Fourth Quarter and Full Fiscal Year 2025 Earnings Conference Call. This call is being recorded. I will now hand it over to Nathan Rutledge, Senior Vice President of Investor Relations. Please proceed.

Thank you, and good morning, everyone. We hope you've had an opportunity to read our earnings release, which we issued yesterday afternoon and is posted on our Investor Relations website. We have also provided presentation slides to facilitate today's call. So let's move to Slide 2. Please note, this morning's discussion will contain forward-looking statements that are subject to important factors that could cause actual results to differ materially from anticipated. I refer you to our SEC filings for a discussion of these factors, including the Risk Factors section of our annual report on Form 10-K. The statements represent our views as of today, and subsequent events may cause our views to change. We may elect to update the forward-looking statements at some point in the future, but specifically disclaim any obligation to do so. In addition, we will discuss pro forma financial measures prepared in accordance with Article 11 of Regulation S-X as well as non-GAAP financial measures, which we believe provide useful information for investors. Both our earnings release and supplemental presentation slides include reconciliations to the most comparable GAAP measures. We do not provide reconciliations of forward-looking non-GAAP financial measures due to the inherent difficulty in forecasting and quantifying certain significant items. These pro forma and non-GAAP financial measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Our safe harbor statement included on this slide should be incorporated as part of any transcript of this call. With me today to discuss our business and financial results are John Heller, Chief Executive Officer; and Travis Johnson, Chief Financial Officer. We are also joined by other members of management, including Steve Arnette, Chief Operating Officer. With that, moving to Slide 3, it's my pleasure to turn the call over to our CEO, John Heller.

Thank you, Nathan, and thank you, everyone, for joining us today. Fiscal year 2025 marked Amentum's first full year as a public company, a transformational year that helped define who we are, our differentiated position in the marketplace and where we're going. It was a year of disciplined execution, strong performance, and meaningful progress across every part of our business. I am so proud of our people and what we've accomplished together. At Capital Markets Day in August of last year, we established our objective to successfully integrate and deliver end-to-end advanced engineering and technology solutions to government, international, and commercial customers across key end markets, including defense, nuclear energy, intelligence, and space, and we're executing exactly as we had envisioned. As a result, Amentum has established a solid foundation for sustainable growth. This morning, I will detail how Amentum has proven our ability to operate with agility, deliver for our customers, and create long-term value for our shareholders. I will focus on 3 key areas: first, an overview of how this exceptional year unfolded and how it positions Amentum for a promising future. Second, highlights from an impressive quarter, including strategic awards and key performance metrics; and finally, our strategy to drive Amentum's growth in fiscal year 2026 and beyond. Let's begin on Slide 4, which captures the core of our fiscal year 2025 performance centering around Amentum's people, operational excellence, financial performance, and effective execution of our strategy. First, our people. Fiscal year 2025 tested our resilience, and our people delivered. Against the backdrop of evolving customer priorities, our team stayed focused and delivered without pause. Our leadership maintained its steady focus on the fundamentals, protecting the long-term health of the business, ensuring continuity for our customers, and ensuring that our people continue to thrive regardless of the market environment. Through a dynamic operating environment, our teams continued designing and delivering critical solutions for our customers. That resilience is reinforced by our ability to hire thousands of skilled professionals worldwide, maintaining attrition well below the industry average, and in our continued recognition as an employer of choice. We take pride in being a company where people want to build their careers while having a positive impact on our world. To that end, we're continuing to expand our centers of excellence, which provide specialized technology to drive innovation and progress. For example, we recently opened our nuclear Center of Excellence in Oak Ridge, Tennessee, which serves as a strategic hub for nuclear expertise for North America. We've launched technical connection teams and mobilized an AI expert community network supporting upskilling and innovation at every level across the globe. The integration of our legacy businesses was one of the most significant in our industry's history, a massive undertaking that demanded focus, collaboration, and discipline across every part of the company. Thanks to our team, we have exited all transition service agreements, completed all of our key integration milestones on time and within budget, and are on track to deliver at least $60 million in net run rate synergies by the end of fiscal year 2026. That operational readiness, anchored in the strength of our people and culture, is one of Amentum's defining advantages, and it translated directly into strong financial performance. As a result, we met or exceeded guidance across every key metric, underscoring our consistency and discipline. Starting with revenues, which increased to $14.4 billion, representing pro forma growth of 4%. Adjusted EBITDA of $1.1 billion, an increase of 5% year-over-year. Adjusted diluted earnings per share of $2.22 was up 11% and free cash flow of $516 million, supporting acceleration of our debt reduction objectives, bringing net leverage to 3.2x. These results demonstrate the strength of our operations and the reliability of our business model. Taken together, this year's achievements underscore the strength and breadth of our platform. In short, we executed with precision and strength, delivering on our commitments while positioning Amentum for sustained success. Please turn to Slide 5. Our disciplined execution and focus on growth translated into a series of strategically significant wins that strengthen our position across key markets. During fiscal year '25, we submitted $35 billion in bids, achieving a full year book-to-bill ratio of 1.2x and a quarterly book-to-bill ratio of 1.6x. Our backlog grew 5%, reaching over $47 billion. And at year-end, we had $20 billion in proposals awaiting awards. Our quarterly book-to-bill ratio was driven by $6.4 billion in total bookings, reflecting continued demand in several strategically important wins, including the U.S. Space Force Range contract, a new $4 billion 10-year single-award IDIQ. This award, now adjudicated and booked into backlog, is one of the largest services contracts ever awarded by this customer. It cements Amentum's leadership in space systems and technology and solidifies our position in this fast-growing market. In the U.K., Sellafield selected Amentum as a remediation partner for the site under a $1.8 billion 15-year contract, where we are leveraging our advanced decommissioning solutions, systems engineering, and next-generation nuclear material processing and disposition capabilities. Another exciting win came from the civilian side of our space portfolio with the NASA Cosmos contract, which is a 9-year $1.8 billion joint venture award to deliver critical mission operations, systems and training solutions supporting NASA's current space flight programs and enabling future deep space exploration. In the quarter, we were notified that this award is being protested; therefore, it is not included in our fourth quarter backlog or book-to-bill results. We are confident in the strength of our bid and look forward to its resolution. And finally, we secured nearly $700 million in awards providing a range of advanced engineering and technology solutions for intelligence customers, including a win developing and delivering AI-enabled software coding solutions. Together, these results underscore the trust that our customers have placed in Amentum to execute complex programs at scale, and we enter fiscal year 2026 with strong momentum, preparing to bid at least $35 billion. Turning to Slide 6. Fiscal year 2025 brought significant change, not just in Washington, but across the globe and throughout our industry. The transition to a new administration introduced a new set of priorities and objectives, impacting contracting time lines, funding cycles, and future spending direction. For Amentum, this environment reinforced the strength and resilience of our business model. Our work is anchored in mission-critical long-duration programs that are essential to national defense, energy security, and space superiority. Our diverse portfolio, which includes 20% of revenue tied to commercial and international work, provides a degree of insulation from sector volatility. Combined with our strong backlog and robust pipeline, we have high visibility into future revenues. This structural agility allows Amentum to rapidly adapt to shifting priorities while delivering consistent results for customers. As the government refocuses on efficiency, speed, and accountability, Amentum is well positioned. Our scale, performance record, and proven operational discipline make us a trusted partner to our customers. For investors, that combination represents a low-risk, high visibility opportunity at a time when consistency and reliability are at a premium. Simply put, Amentum represents stability in a period of transition. Let's turn to Slide 7 to discuss Amentum's growth strategy. Our core growth areas where we have long-standing leadership positions across large, stable, mission-critical areas provide dependable revenue, strong cash flow, and predictable returns, and they remain central to the steady performance that defines our company. These areas, underpinned by several core capabilities, are deployed across multiyear, often multi-decade programs, and some notable areas include RDT&E, intelligence operations and analysis, homeland security and border protection, environmental remediation, and defense engineering, logistics, and modernization. As an example, you can see this in work on our ITEAMS program in INDOPACOM, where we're strengthening C5ISR capabilities for the U.S. Armed Forces by applying rapid prototyping and digital engineering methods to accelerate speed to mission. It's also reflected in our support to the Naval Surface Warfare Center Crane, where we integrate next-generation sensors and apply model-based systems engineering to enhance reliability and life cycle management. Whether we're leveraging machine learning solutions in support of customers across homeland and national security missions, delivering digital engineering tools on behalf of intelligence customers, or deploying advanced environmental solutions around the world, our core growth areas deliver consistent performance and create the platform from which the rest of our business continues to scale. Turning to Slide 8. Complementing that foundation are our accelerating growth markets powering our future growth, space systems and technologies, critical digital infrastructure, and global nuclear energy. They are growing rapidly, fueled by generational investments in national security, energy resilience, and advanced technologies such as AI, robotics, and automation. They are also margin accretive, relying on advanced engineering, AI-enabled integration, and high-value technical expertise. And they are global, creating opportunities across the U.S., U.K., Europe, and other allied nations where Amentum's credibility and scale make us a natural choice for government and commercial customers seeking a trusted partner. Now let me provide a bit more detail on these markets. First, the rapidly evolving market for space systems and technologies is generating demand signals from both the national security community and a fast-growing commercial sector. Our work in launch infrastructure, systems integration, and space flight operations positions Amentum at the intersection of government and commercial space, supporting missions that will define the next generation of space exploration and defense readiness. Next, we're excited about our growing work providing digital infrastructure solutions. Here, we're supporting advanced telecom systems, deploying next-generation data center solutions, and engineering the backbone of networks for national security and commercial customers alike. For example, commercial awards in fiscal year 2025 encompass the design, deployment, and optimization of 5G networks and critical infrastructure management. Through strategic partnerships and capabilities, including MDSE-enabled platforms often leveraged from work in our core growth areas, we're future-proofing networks and data centers to meet the demands of low latency, data-intensive mission environments. By combining our engineering depth with turnkey connectivity and resilient cloud architectures, Amentum is positioning itself as a trusted provider of mission-critical digital infrastructure for the world's most demanding users. And finally, turning to Slide 9. As I reviewed during last quarter's call, Amentum is well positioned to lead the next generation of nuclear power. Our teams deliver full life cycle nuclear engineering capabilities, including design and licensing to construction, operations, modernization, and life extension and decommissioning. The global resurgence of nuclear energy driven by energy security needs and the explosive demand from artificial intelligence and next-generation manufacturing is creating a market with substantial tailwinds. For Amentum, this represents a multi-decade opportunity for sustained double-digit growth and meaningful margin expansion. I look forward to providing future updates on our work in the nuclear market and diving deeper into the space systems and technologies and critical digital infrastructure markets on future earnings calls. When you combine the durability of our core growth areas with the momentum of our accelerating growth markets, the result is a portfolio that delivers both stability and scalability. Our lower-risk, long-cycle businesses generate the cash flow and institutional strength that allow us to incubate high-growth opportunities without compromising financial discipline or balance sheet flexibility. This is how we think of Amentum's strategy for growth, a well-positioned portfolio that consistently delivers growth, margin expansion, sustainable free cash flow, and compounding returns year after year. With that, I'll turn it over to Travis.

Thank you, John, and good morning, everyone. I'm excited to discuss with you today another outstanding quarter of performance that capped off what has been an exceptional first year for Amentum as a publicly traded company and to share our outlook for fiscal year 2026, which reflects momentum we're seeing across the business and underlying growth across all key metrics. As John noted, our strong finish to the year demonstrates the continued resilience of our diversified portfolio and was enabled by the extraordinary efforts of our dedicated employees around the world. Their unwavering commitment to execution and operational excellence delivered both exceptional outcomes for our customers and financial results that surpassed our expectations. With that, let's begin with an overview of our financial performance on Slide 10. I'd like to again highlight that while our GAAP results provide an accounting view of Amentum's legacy business, excluding CMS, today's discussion will focus on our non-GAAP results compared to the pro forma results from fiscal year 2024. These figures offer a combined view of the new Amentum business and provide performance insights on a more comparable basis. Revenue momentum accelerated to end the year with $3.9 billion for the quarter and $14.4 billion for the year. The strong performance was driven by continued demand and year-over-year increases in both Digital Solutions and Global Engineering Solutions and exceeded our expectations as a result of non-labor timing and higher customer spend ahead of the government shutdown. On an underlying basis, after normalizing for the previously disclosed additional working days, joint venture transitions, and divestitures, revenue growth was approximately 4% for the quarter and 2.5% for the full year. Adjusted EBITDA of $300 million in the quarter resulted in $1.1 billion for the full year, representing annual growth of 5% and adjusted EBITDA margin expansion of 10 basis points. Full year margins, which were impacted by a higher non-labor mix in the fourth quarter, benefited from strong operational performance in both segments and from our cost synergy initiatives. Adjusted net income was $154 million for the quarter and $542 million for the year, which generated adjusted diluted earnings per share of $0.63 for the quarter and $2.22 for the year. Adjusted EPS grew 11% year-over-year, consistent with the strong revenue and margin expansion performance. Moving to our reportable segment results on Slide 11. Digital Solutions generated revenues of $1.5 billion for the quarter and $5.5 billion for the year, representing 11% and 7% growth, respectively. The year-over-year increases were driven by the ramp-up of new contract awards, led by continued strength in the commercial digital infrastructure market and additional working days, which more than offset expected contract ramp downs and the divestiture of Rapid Solutions. Adjusted EBITDA increased to $116 million for the quarter and $437 million for the year, resulting in full year growth of 8% and adjusted EBITDA margins of 7.9%. Turning to Slide 12. Global Engineering Solutions generated revenues of $2.4 billion for the quarter and $8.9 billion for the year, representing 9% and 2% growth, respectively. The year-over-year increases were driven by new contract awards, growth on existing programs, and additional working days, which more than offset the expected contract ramp downs and the impact from JV transitions in the fourth quarter. Adjusted EBITDA increased to $184 million for the quarter and $667 million for the year, resulting in full year growth of 3% and adjusted EBITDA margins of 7.5%. Turning to Slide 13 to cover our cash flow and capital structure highlights. Fourth quarter and full year free cash flow of $261 million and $516 million, respectively, were slightly better than our expectations and reflects strong cash earnings and our continued unwavering focus on working capital efficiency. This performance enabled additional debt repayments of $550 million during the quarter, bringing full year repayments to $750 million and reducing our net leverage to 3.2x. We ended the year with $437 million in cash, an undrawn $850 million revolver, and no near-term maturities. With an enhanced balance sheet position, we now have an accelerated and clear path to achieving net leverage of less than 3x by the end of fiscal year 2026. Looking ahead, we will remain disciplined in our approach, maintaining a prudent capital structure that enables flexible and opportunistic deployment. Whether we are investing to drive sustained organic growth, reduce debt, pursue accretive strategic acquisitions, or return capital to shareholders, our goals are the same: maximize free cash flow per share and deliver strong compounding shareholder returns. Simply stated, we're committed to retaining the financial strength that enables Amentum to grow, invest, and create long-term value while doing so with precision, prudence, and purpose. On Slide 14, let's now discuss our fiscal year 2026 outlook. Based on our bottoms-up forecast process for fiscal 2026, we expect revenues in the range of $13.95 billion to $14.3 billion or 3% growth at the midpoint after normalizing for the additional working days, JV transitions, and divestitures previously mentioned. The ramp-up of new program awards and on-contract growth is expected to more than offset the wind down of certain historical programs and impacts from the federal government shutdown. While the majority of Amentum's work is mission-critical and continued without interruption, our guidance contemplates an approximately 1% impact as a result of reduced spending in Q1 on certain programs and from delays in award decisions. With less than 10% of revenues expected to come from new business and with $20 billion of submitted bids awaiting award decision, we have good visibility and are confident in our position starting the fiscal year. We expect adjusted EBITDA in the range of $1.1 billion to $1.14 billion, reflecting underlying growth of 5% at the midpoint, driven by margin expansion of approximately 20 basis points as we realize the benefits of our cost synergy initiatives as well as contract mix and operational improvements. We expect adjusted diluted earnings per share of $2.25 to $2.45, up 12% at the midpoint on an underlying basis, which assumes 245 million weighted average shares outstanding and a tax rate of about 24.5%. And finally, we expect free cash flow of $525 million to $575 million, or 12% underlying growth at the midpoint, driven by higher cash earnings and reduced interest from our debt reduction initiatives. As it relates to timing, we expect first quarter revenues and adjusted EBITDA to be consistent year-over-year on an underlying basis, followed by quarterly sequential increases as newly awarded programs, including the key awards John mentioned earlier, ramp up throughout the year. Free cash flow is also expected to follow normal seasonality with the majority generated in the second half of the fiscal year as a result of fringe benefit and payroll timing and as a result of expected strong collections in the fourth quarter, given our alignment with the government's fiscal year-end. Additional key assumptions for our guidance are included on Slide 14 in today's presentation posted on our Investor Relations website. Wrapping up on Slide 15. As we conclude a transformative year for Amentum, highlighted by exceeding our financial commitments in a dynamic market environment, advancing our growth objectives with key strategic wins and a 1.2x book-to-bill, and surpassing our cash flow and deleveraging expectations, we are excited about the road ahead. Our portfolio is strategically aligned with enduring global trends, customer priorities, and tailwinds in accelerating growth markets. While pleased with our current progress and achievements, we remain focused on delivering our strategic objectives and driving long-term value for all stakeholders. With that, operator, please open the line for questions.

Your first question comes from Colin Canfield with Cantor.

Can you discuss perhaps the level of kind of timing or onetime margin and cash flow dynamics in the quarter? And then how much Section 174 benefits were included in fiscal 4Q versus the guide? And then maybe talk through if there are any kind of pull forward or pushout dynamics around margins and cash related to the merger?

Colin. A little bit to unpack there, obviously, all focused on cash. Maybe starting at the top. Obviously, we're pleased with our year-end cash performance, which, as I said in my prepared remarks, slightly exceeded our expectations as a result of the strong revenue performance that we saw in the year. As far as onetime items in the quarter, obviously, we've talked about the additional working days, which generated additional cash, around $20 million is the impact from that. So that would be kind of an item to normalize as we head into FY '26. And then moving into FY '26, we're obviously really excited about the cash flow trajectory. We're expecting, as I said, 12% growth at the midpoint of our guidance on an underlying basis. And we do expect to receive some benefits from the OBA tax law changes around immediate expensing of R&D, also smaller benefits, but still benefits around disallowed interest and CapEx bonus depreciation. So altogether, that's about a $35 million benefit to tax cash payments in FY '26. So put all that together, and again, just right along where we expected to be at this point, driving that double-digit free cash flow growth that we committed to at Capital Markets Day and excited to continue to head in that trajectory.

Got it. And then maybe level setting us on the multiyear margin progression in terms of the synergy targets. I think one of the thesis that kind of folks are focused on is essentially shutdown-related dynamics just pushing everything 1 year to the right, but still fundamentally happening. So perhaps if you could talk through kind of how you think about FY '26 margin progression, the synergy contribution, and perhaps kind of the multiyear framework set out at the Investor Day?

Sure. As we mentioned at Capital Markets Day, our long-term goal is to achieve margins of 8.5% to 9% by FY '28. Currently, we are right on track with our expectations. Cost synergies played a role, and we achieved a margin expansion of 10 basis points in FY '25, with our guidance for FY '26 indicating an additional 20 basis points. Overall, this amounts to a total of 30 basis points in the first two years, aligning perfectly with our anticipated trajectory. As we approach FY '27, we will realize the full annual impact of our cost synergy initiatives. Additionally, we are progressing well with all integration activities, including cost synergies, and we expect to surpass $60 million in net run rate cost synergies by the end of FY '26.

We discussed our overall two-pronged growth strategy for the first time during the call. This encapsulates the essence of our narrative. A year ago, we recognized that this would be a transitional year focused on integration and identifying genuine opportunities for growth that neither of the companies could pursue individually. We are committed to developing a strategy that leverages our broad enterprise momentum. We highlighted our strong position in core markets, which positions us well for sustained growth. However, we have also pinpointed accelerated growth markets, where we are already leaders, but which currently represent only $4 billion of our $14 billion company. We believe that the growth potential and margin improvement opportunities in these segments are substantial. By concentrating our efforts on the three accelerating growth markets—Space Systems and technologies, critical digital infrastructure, and global nuclear energy—we expect to enhance our margins. Therefore, we remain optimistic about achieving the targets we set, aiming for a margin of 8.5% to 9% by 2028.

Got it. And maybe sneaking in a third, if you could just update us on how you think about kind of the timing, magnitude, and multiple of any potential divestitures as well as the timing and magnitude of the upcoming SLS award.

I'm sorry, repeat the second part of the question to what award, I didn't catch all of that.

SLS. So there's $4 billion in the reconciliation bill. It's been 3 years since we've gotten a pretty major SLS award and the competitive dynamics of that race are obviously a national security focus as well. So I just want to make sure we're level set up.

Yes. Thank you for the repeat. Happy to provide just a little bit of color on the Space Force Range contract. It is a topical issue for us right now because we've gotten through a successfully protest period, and our teams are busy work right now today even as we prepare to assume operation for that large contract in December. So really excited about the Space Force Range contract. Really, just a quick synopsis at the top level, work on that contract about making sure the U.S. has assured access to space. And actually, there was a great article just yesterday in the Space News publication where they interviewed Colonel Chatman, who's the commander of Space Launch Delta 45, and he talked about how the launch cadence just continues to ramp. And both on the Eastern and Western range, we're working with Apollo Aera infrastructure. He highlighted how Congress has appropriated nearly $1.5 billion to be invested between now and 2028 to begin to upgrade that infrastructure. And so for us, at Amentum, we're coming in at an exciting time to that contract. So we're there certainly to maintain and sustain and support this launch cadence, but we're also there to engineer, upgrade and integrate all the capabilities needed for the future. So very excited about how that's going to play out beginning in December, phase in underway.

Yes. Just to clarify, that contract has successfully passed the protest, and we are actively executing it now. As Steve mentioned, we're really excited. Regarding your first question about portfolio shaping, we are thrilled about the opportunity with Rapid Solutions in our New Zealand operations and the clearly defined noncore aspects of our business. At this time, we feel very positive about our entire portfolio and the capabilities we've assembled. We're utilizing these across our entire organization, which is crucial for us as we view the company as a whole and avoid creating silos. We are applying our different capabilities to every opportunity we pursue. Currently, we are enthusiastic about our portfolio. We conduct strategic planning annually to identify the biggest growth opportunities and will assess any noncore assets accordingly. Overall, we are genuinely excited about what we have developed, and it's proving effective.

And the next question comes from Brian Gesuale with Raymond James.

Nice job on the print here. I want to dig in a little bit to these growth areas, John, if I could. Can you remind us how you play throughout the entire kind of nuclear life cycle, how big that business is today? And maybe as you lay out these broad ambitions for nuclear power in the future that have been put forward, when you'll start to see some of those things inflect for your business?

Yes, certainly. We discussed this last quarter as well, so I encourage everyone to refer back to that. There’s an additional slide from last quarter that we included in this one, which addresses your question directly. We play a crucial role throughout the nuclear energy life cycle, starting from design and construction through to commissioning, operation, maintenance, and decommissioning. This encompasses all industry sectors, including the development, construction, and operation of gigawatt-sized reactors. We're also involved in small modular reactors, with significant global activity aimed at developing this capability. While we're collaborating with many developers to bring these capabilities to market, it will take some time and much engineering work is expected throughout this decade. Additionally, we are focused on plant life extension and upgrades, noting developments like the 3 Mile Island situation. We aim to ensure we can meet electricity demands for AI data centers, robotic manufacturing, and the overall increase in electricity needs. This is a vital aspect of the economy and is recognized as a national security priority by the current administration, which is driving positive policy changes that are spurring a rejuvenation of the nuclear sector in the U.S.

Great. Really helpful. I want to talk also maybe about one of the other growth areas that we're really excited about on the space side of things. Can you maybe help us understand how much of that business is commercially oriented in defense given there's just so much activity in both those areas? And maybe if you could help us think a little bit about how Golden Dome from a presence and a launch activity perspective would drive your business and maybe the timing of that, whether that's part of '26 or part of an unfolding '27 story that's yet to reveal itself.

Yes. Today, I mentioned, we're just super excited about where we're at in this market and the continuing accelerating growth opportunities. Just to start, I think most people are familiar with the leading presence we have supporting the government with NASA and the whole civilian space exploration and all of those activities. A lot of Amentum colleagues right now preparing for the Artemis II mission that's scheduled for early 2026, and we're excited to be such a critical player in putting astronauts back in space and really excited about the preparations for that mission, everything from integrating the vehicle, launch control software, mission control software. And I think that our recent win on Cosmos, where we'll have now an Amentum team at NASA Johnson Space Center becoming engaged in mission operations and all of the things that extend through the complete life cycle of the mission kind of speaks to our strength in supporting that customer and their missions. Of course, that contract currently is undergoing corrective actions, so we're not underway yet. but that's a really good one. As far as your question about Golden Dome, just to give a bit of insight there, we really think we have a great right to win in terms of being a part of the solution that the U.S. government is developing. Today, we're heavily engaged with the Missile Defense Agency and helping to take the missile defense system digital, if you will. It's allowed us to deploy things like the hypersonic next-gen satellites for detection. We're doing things like virtual engineering, digital methods to integrate new technologies into the system. That capability and that expertise, we're also deploying for the NORAD mission, which is the North American Aerospace Defense Command. And so we're really excited about those capabilities. And the way Golden Dome comes to life for us is right now, the government is moving out on a Shield procurement. Shield is the acronym for a large IDIQ vehicle. It will be a multiple award vehicle, $150 billion. We are engaged in that procurement like many others in the industry. And so our proposal is them. We're looking forward to the adjudication of that. And I think that specific to your question, as we get toward deeper into FY '26, we'll begin to see specific task orders and tasking come out under that Shield vehicle. So we're excited about the opportunity there. So really cutting across national security as well as civilian space, there's a lot for us to draw on in the portfolio. And I think the last thing I would mention, and it comes into play even with our new Space Force Range contract, John hit it in the prepared remarks, but so many of these contracts put us at the intersection of government and commercial space, and we have a great track record of working with those commercial partners. So we think that proven capability is going to be instrumental for the government to accomplish all of their objectives that they have for the space domain.

Next question comes from Tobey Sommer with Truist.

The company has reduced leverage faster than we anticipated. When do you think you'd be at a point where you may be able to go on offense with capital deployment and start incorporating inorganic growth into the story?

Yes, certainly, we're pleased with the leverage trajectory sitting at 3.2x here 1 year in to our merger and public company transition ahead of where we thought we would be. I'd say we remain committed to getting to that target that we set out at Capital Markets Day last year of less than 3x net levered, and we're on track to do that by the end of FY '26. As you know, our kind of cash timing, 2H will be back half weighted. So we'll get there in the second half of FY '26. And so obviously, now it's right around the corner, right? So we're starting to shift our focus and what that could look like. It will be obviously dependent on what opportunities are out there and available at that point in time. But as I said in my prepared remarks, regardless of what we do at that given point in time with our capital deployment strategy, we'll be looking to maximize free cash flow per share could be part of that, but it also could be continue to pay down debt or returning capital to shareholders. Certainly, as we get out of the kind of 2-year restriction period of the RMC, looking at share buybacks when it's trading at something below the intrinsic value of the stock could be an option. So we look forward to getting there in the second half of '26.

Yes. To summarize that discussion, we have identified several accelerating growth markets that we view as organic opportunities due to the new momentum we have created. We believe we can leverage these three areas: space systems and technologies, critical digital infrastructure, which we will discuss more in future calls, focused on supporting the AI economy, and global nuclear energy, where we are confident in our ability to capitalize on our organic capabilities. While we are open to considering mergers and acquisitions in the future to enhance our growth, we are assured that we can succeed and expand in these areas now.

I appreciate that. And I just sort of have a modeling question since some of the growth areas have already been discussed of interest. Are there timing or mix issues for us to contemplate near term in modeling the quarterly cadence of revenue and EBITDA across fiscal '26?

So just as we look at the time phasing throughout FY '26, Q1 will obviously have the impact from the government shutdown, but that will normalize throughout the year. So we do expect quarterly sequential increases in both revenue profitability and cash flow for that matter. Maybe just to provide a little bit more color, we see digital solutions as the predominant driver of growth for the company in FY '26. Obviously, Space Force Range contract is in that segment, and that will be ramping up as we grow throughout the year on that contract. And some margin expansion in Digital Solutions, maybe a little bit more modest than what we expect to see in Global Engineering Solutions. But we do expect some revenue growth in Global Engineering Solutions as well due to continued ramp-up of some new work as well as on-contract growth. And that's where we believe a lot of the margin expansion will come from in FY '26. So you can think about FY '26 kind of quarterly sequential increases as we move throughout the year.

The next question comes from Mariana Perez Mora with Bank of America.

I wanted to follow up on the nuclear opportunities. In the prepared remarks, you mentioned double-digit growth and margin accretive type of work. When you talk about these margins, are they accretive because they are coming like significant like EBITDA pure to the contract? Or it's mostly because a lot of them come through nonconsolidated like joint venture type of EBITDA added to the segment? And then as a follow-up to that, when we think about these opportunities, how fast can they actually come? For example, on the $20 billion that you have in the pipeline expecting to be awarded, how much of that is related to nuclear?

Yes, I'll take the first part of the question, Mariana. And then John, maybe you can tackle the second part of that. When we look at the front-end nuclear energy market, it's more of the former as it relates to margin expansion, not unconsolidated joint ventures. A lot of that work tends to come not only in the U.S. commercial, but also international, right? And due to the nature of the work and our capabilities and what we're providing there, it does tend to be margin accretive to the overall portfolio. Not to say that especially on kind of back-end environmental remediation, decommissioning, there could be some joint venture opportunities that could also be margin accretive. But as we look to the future and where we expect the growth to come from out of that part of our portfolio, it's certainly not JV consolidation. It's more of the nature of work.

We are currently active in the global nuclear market, which constitutes about 17% of our business. We are recognized as a leader in the United States and Europe and have established our presence in Japan due to our historical work. This sector is contributing significantly to our strong margins. With the current demand for electricity and AI-driven data centers, there is a renewed interest in nuclear energy. However, developing nuclear power takes considerable time, including extensive design and planning before construction can begin. We have extensive experience, having been involved in every nuclear power plant built in the U.K. Despite a lack of consistent activity in the U.S. industry, there is strong support from the government and industry for bringing new capabilities online. An executive order from President Trump aims to see ten additional gigawatt plants under construction by 2030, which seems achievable with dedicated effort, and we are well-positioned to assist in reaching this goal by collaborating with industry partners. As for small modular reactors, progress will take longer as we are currently focused on assembling and validating designs for certification and future construction. Significant engineering work will take place over the next decade before we can begin SMR projects.

And then as a follow-up to margins, fourth quarter and fiscal '26 margins came in a little bit lighter than expected according to what you said in the Investor Day. Besides the nuclear opportunity that will come with this accretive margins, what are the other drivers that will get you to the 8.5% to 9% that you expect to have by '28?

Yes. Certainly, as John talked about, the accelerating growth areas in aggregate, not just global nuclear energy, but also critical digital infrastructure and space systems and technologies in total are margin accretive to the portfolio. And as we see those outpace growth of the rest of the portfolio in our FY '26 guidance, we expect average growth in margins across the board in addition to, obviously, the cost synergy initiatives that we've talked about and little bit of Q&A on that today, but those will drive, call it, 30 to 50 basis points as we move through FY '27 into FY '28. So those combined are the predominant drivers of the margin expansion.

The next question comes from Andre Madrid with BTIG.

DOGE came to an earlier-than-expected end, probably around 8 months ahead of schedule. Previously, there was an anticipation of a 1% headwind going into '26 due to policy changes. Now, I see a 1% headwind due to the shutdown. Is this just shifting toward that? It seems like perhaps some ground could have been made up on the policy shift side because of the end of DOGE, but now it’s a headwind from the shutdown. I'm trying to understand how these factors are interacting. Should we expect both of these pressures to be in effect simultaneously?

I would think about it, Andre, as not related at all. We obviously went through the administration change, those, all of that throughout '25, and we did call out the approximate 1% impact to the portfolio. That was back half weighted. We'll see some noise of that continuing kind of throughout the first quarter or two here of FY '26, but nothing significant to call out. And separate and independent of that, as we see in times of government shutdown in the past, obviously, this one was a little bit extended more than we've seen in the past, but some disruptions to spending on contracts and then some delays in the procurement environment is the 1% that we called out for this fiscal year. But all that being said, still feel good about the trajectory of the underlying business, excluding that government shutdown impact, 4% growth at the midpoint on revenue, above mid-single digits on EBITDA, and obviously double digit on EPS and free cash flow despite those dynamics that are occurring.

Got it. And regarding debt paydown, you still have some distance to go until reaching less than 3 turns. How should we consider the pace of that throughout the year? Are you planning to take it a step further? Should we expect that a significant portion of free cash flow will still be allocated for the year?

Yes. So the predominance of our cash flow will follow normal seasonality and be generated in the second half of FY '26, which is when you'll see us start to get to below the 3x net leverage that we've talked about.

We have discussed our core markets and remain confident in them. We are considering investments in these areas as well as in the three accelerating growth markets. Each of these areas continues to show significant strength for the business. Additionally, we have emphasized our strategic focus on these priority areas.

And the next question comes from Ken Herbert with RBC Capital Markets.

I wanted to inquire about the 2026 and midterm growth outlook. Can you provide more details on the growth you're anticipating from the accelerating growth portfolio, particularly as we consider the 3% to 4% organic growth projected for 2026? Are you expecting high single digits for that market, specifically for the accelerating growth businesses? Additionally, how much do you anticipate that growth will increase in 2027 and 2028?

Yes. I will start, and then John can add his thoughts. For fiscal year 2026, excluding the possibility of a government shutdown, we anticipate an underlying revenue growth of 3% to 5%. This aligns with our expectations at this moment. As we progress and start to benefit from our pipeline and the newly merged company's initiatives, along with the growth in the markets that John highlighted, we believe this growth will not only accelerate through fiscal year 2026 but also into 2027 and beyond. Awards like the Space Force Range and the Sellafield award, both in those growth markets, are expected to contribute as we approach the latter half of 2026.

Yes. And Steve talked about some of the opportunities, I think, that we're seeing in the space market that we think will adjudicate this year and therefore, impact next year in a more significant way. And I think the same as we think about the global nuclear energy market, we continue to see an uptick in activity, which will accelerate this year through next year. So we should see a higher pace of activity in that market as we think about '27 and '28 as well. And then the digital infrastructure, we have strong activities in working with the hyperscalers on helping with design and development of upgrades to data centers, as an example, on telecom, outfitting 5G networks and beyond. So we see areas like this will also continue to expand for us as we continue to reach into other hyperscalers with these capabilities and push the growth of those into '27 and '28 as we kind of break into new customers with these offerings.

Yes. So we're really confident in kind of the composition of revenue in our FY '26 guidance. Over 90% of it will be coming from firm and follow-on work, so less than 10% from new business, and it's less than 5% recompete risk.

Thank you. And that is all the time we have for questions. I would like to turn it back to John Heller, CEO, for closing remarks.

Thank you. As we enter a new year, we're encouraged by our performance and confident in the path forward. Our strategy remains firmly aligned with long-cycle mission-critical markets, and we remain agile to meet the evolving needs of our customers. I want to extend my sincere thanks to our employees, particularly those who were impacted by and those who worked tirelessly to support our customers during the government shutdown. Their resilience and professionalism exemplify what makes Amentum a trusted partner. We are well positioned to capture growing demand in our core growth areas and our accelerating growth markets and to deliver sustainable long-term value for our shareholders. Thank you for your continued interest in Amentum. We look forward to sharing our progress in the quarters ahead. We wish everyone a safe and joyful holiday season.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.