Kbr, Inc 10-Q for FY2025 Q3

Kbr, Inc. (KBR)

10-Q 2025-10-30 For: 2025-10-03

Added on April 11, 2026

About this 10-Q

Kbr, Inc filed this 10-Q on October 30, 2025, covering the quarter ended October 3, 2025 (FY2025 Q3).

Headline figures

Quarter ended October 3, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.93B; down 0.3% from $1.94B a year earlier
Net income: $115M; up 15.0% from net income of $100M a year earlier
Diluted EPS: $0.90; up 20.0% from $0.75 a year earlier

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Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $0.001 par value	KBR	New York Stock Exchange



			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)			5
Condensed Consolidated Statements of Operations			5
Condensed Consolidated Statements of Comprehensive Income			6
Condensed Consolidated Balance Sheets			7
Condensed Consolidated Statements of Shareholders' Equity			8
Condensed Consolidated Statements of Cash Flows			10
Notes to Condensed Consolidated Financial Statements			11
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			33
Item 3. Quantitative and Qualitative Disclosures About Market Risk			47
Item 4. Controls and Procedures			49
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			50
Item 1A. Risk Factors			50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			51
Item 5. Other Information			51
Item 6. Exhibits			52
SIGNATURES			53


Acronym						Definition

AOCL						Accumulated other comprehensive loss
ASC						Accounting Standards Codification
Aspire Defence						Aspire Defence Limited
ASU						Accounting Standards Update

BRIS						Brown & Root Industrial Services Joint Venture
C5ISR						Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance and Reconnaissance
CAS						Cost Accounting Standards for U.S. government contracts
DCAA						Defense Contract Audit Agency
DCMA						Defense Contract Management Agency
DoD						Department of Defense







ESPP						Employee Stock Purchase Plan
Exchange Act						Securities Exchange Act of 1934, as amended
FAR						Federal Acquisition Regulation
FASB						Financial Accounting Standards Board


FKTC						First Kuwaiti Trading Company











JKC						JKC Australia LNG, an Australian joint venture executing the Ichthys LNG Project

LNG						Liquefied natural gas
MD&A						Management's Discussion and Analysis of Financial Condition and Results of Operations

MTS						Mission Technology Solutions
MoD						Ministry of Defence
NASA						National Aeronautics and Space Administration
NCI						Noncontrolling interests

PFIs						Private financed initiatives and projects
PIC						Paid-in capital in excess of par

PPE						Property, Plant and Equipment


RPA						Master Accounts Receivable Purchase Agreement

SEC						U.S. Securities and Exchange Commission
SOFR						Secured Overnight Financing Rate
SONIA						Sterling Overnight Index Average
STS						Sustainable Technology Solutions



U.K.						United Kingdom
U.S.						United States
U.S. GAAP						Accounting principles generally accepted in the United States


VIEs						Variable interest entities


	Three Months Ended				Nine Months Ended




	October 3, 2025		September 27, 2024		October 3, 2025		September 27, 2024

Revenues	$	1,931	$	1,937	$	5,901	$	5,602
Cost of revenues	(1,661)		(1,647)		(5,041)		(4,794)
Gross profit	270		290		860		808
Equity in earnings of unconsolidated affiliates	70		27		163		97
Selling, general and administrative expenses	(149)		(140)		(435)		(390)





Other	—		(4)		(1)		4




Operating income	191		173		587		519
Interest expense	(39)		(37)		(121)		(100)

Other non-operating expense	—		(2)		(5)		(10)
Income from continuing operations before income taxes	152		134		461		409
Provision for income taxes	(34)		(32)		(116)		(107)
Net income from continuing operations	118		102		345		302
Net income (loss) from discontinued operations, net of tax	(1)		—		(55)		1
Net income	117		102		290		303
Less: Net income attributable to noncontrolling interests included in continuing operations	2		2		4		3
Less: Net income (loss) attributable to noncontrolling interests included in discontinued operations	—		—		(18)		1
Net income attributable to KBR	$	115	$	100	$	304	$	299

Net income attributable to KBR per share
Basic earnings per share from continuing operations	$	0.91	$	0.75	$	2.62	$	2.22
Basic loss per share from discontinued operations	$	(0.01)	$	—	$	(0.29)	$	—
Basic earnings per share attributable to KBR	$	0.90	$	0.75	$	2.33	$	2.22

Diluted earnings per share from continuing operations	$	0.91	$	0.75	$	2.62	$	2.22
Diluted loss per share from discontinued operations	$	(0.01)	$	—	$	(0.29)	$	—
Diluted earnings per share attributable to KBR	$	0.90	$	0.75	$	2.33	$	2.22

Basic weighted average common shares outstanding	128		133		130		$	134
Diluted weighted average common shares outstanding	128		133		130		$	134
Cash dividends declared per share	$	0.165	$	0.150	$	0.495	$	0.450


	Three Months Ended				Nine Months Ended
	October 3,		September 27,		October 3,		September 27,
	2025		2024		2025		2024
Net income	$	117	$	102	$	290	$	303
Other comprehensive income (loss):
Foreign currency translation adjustments	(22)		47		66		39
Pension and post-retirement benefits	1		2		4		5
Changes in fair value of derivatives	(9)		(27)		(24)		(16)
Other comprehensive income (loss)	(30)		22		46		28
Income tax (expense) benefit:

Pension and post-retirement benefits	—		(1)		(1)		(1)
Changes in fair value of derivatives	2		5		5		3
Income tax benefit	2		4		4		2
Other comprehensive income (loss), net of tax	(28)		26		50		30
Comprehensive income	89		128		340		333
Less: Comprehensive income attributable to noncontrolling interests included in continuing operations	2		2		4		3
Less: Comprehensive income (loss) attributable to noncontrolling interests included in discontinued operations	—		—		(18)		1
Comprehensive income attributable to KBR	$	87	$	126	$	354	$	329


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to


	October 3, 2025		January 3, 2025
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	539	$	342
Accounts receivable, net of allowance for credit losses of $7 and $9, respectively	1,122		1,066
Contract assets	247		271

Other current assets	160		173
Current assets of discontinued operations	17		21
Total current assets	2,085		1,873
Pension Assets	126		82
Property, plant, and equipment, net of accumulated depreciation of $500 and $474 (including net PPE of $5 and $5 owned by a variable interest entity), respectively	225		237
Operating lease right-of-use assets	228		203
Goodwill	2,674		2,630
Intangible assets, net of accumulated amortization of $486 and $427, respectively	740		763
Equity in and advances to unconsolidated affiliates	104		192
Deferred income taxes	150		209
Other assets	317		396
Non-current assets of discontinued operations	—		78
Total Assets	$	6,649	$	6,663
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	733	$	772
Contract liabilities	334		328
Accrued salaries, wages and benefits	385		351
Current maturities of long-term debt	46		36

Other current liabilities	249		280
Current liabilities of discontinued operations	24		15
Total current liabilities	1,771		1,782

Employee compensation and benefits	139		135
Income tax payable	85		122
Deferred income taxes	86		83

Long-term debt	2,558		2,533
Operating lease liabilities	245		228

Other liabilities	296		244
Non-current liabilities of discontinued operations	—		69
Total liabilities	5,180		5,196
Commitments and Contingencies (Notes 5, 10 and 11)

KBR shareholders' equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued	—		—
Common stock, $0.001 par value 300,000,000 shares authorized, 182,840,316 and 182,469,230 shares issued, and 126,989,628 and 132,435,609 shares outstanding, respectively	—		—
PIC	2,546		2,526
Retained earnings	1,607		1,367
Treasury stock, 55,850,688 shares and 50,033,621 shares, at cost, respectively	(1,793)		(1,494)
AOCL	(896)		(946)
Total KBR shareholders' equity	1,464		1,453
Noncontrolling interests	5		14
Total shareholders' equity	1,469		1,467
Total liabilities and shareholders’ equity	$	6,649	$	6,663


Dollars in millions	Total		PIC		Retained Earnings		Treasury Stock		AOCL		NCI
Balance at July 4, 2025	$	1,489	$	2,539	$	1,513	$	(1,697)	$	(868)	$	2
Share-based compensation	5		5		—		—		—		—


Dividends declared to shareholders ($0.165/share)	(21)		—		(21)		—		—		—
Repurchases of common stock	(100)		—		—		(100)		—		—
Issuance of ESPP shares	7		2		—		5		—		—
Investments by noncontrolling interests	2		—		—		—		—		2


Other	(2)		—		—		(1)		—		(1)
Net income	117		—		115		—		—		2
Other comprehensive loss, net of tax	(28)		—		—		—		(28)		—
Balance at October 3, 2025	$	1,469	$	2,546	$	1,607	$	(1,793)	$	(896)	$	5


Dollars in millions	Total		PIC		Retained Earnings		Treasury Stock		AOCL		NCI
Balance at January 3, 2025	$	1,467	$	2,526	$	1,367	$	(1,494)	$	(946)	$	14
Share-based compensation	15		15		—		—		—		—


Dividends declared to shareholders ($0.495/share)	(64)		—		(64)		—		—		—
Repurchases of common stock	(304)		—		—		(304)		—		—
Issuance of ESPP shares	13		5		—		8		—		—
Investments by noncontrolling interests	10		—		—		—		—		10

Distributions to noncontrolling interests	(4)		—		—		—		—		(4)

Other	(4)		—		—		(3)		—		(1)
Net income (loss)	290		—		304		—		—		(14)
Other comprehensive income, net of tax	50		—		—		—		50		—
Balance at October 3, 2025	$	1,469	$	2,546	$	1,607	$	(1,793)	$	(896)	$	5


	Three Months Ended October 3, 2025
Dollars in millions	MTS		STS		Corporate		Total
Revenues	$	1,406	$	525	$	—	$	1,931
Cost of revenues	(1,228)		(433)		—		(1,661)
Gross profit	178		92		—		270
Equity in earnings of unconsolidated affiliates	8		62		—		70
Selling, general and administrative expenses	(73)		(36)		(40)		(149)




Other	1		—		(1)		—
Operating income (loss)	114		118		(41)		191
Interest expense	—		—		(39)		(39)
Other non-operating income (expense)	(2)		1		1		—
Income (loss) from continuing operations before income taxes	112		119		(79)		152
Provision for income taxes	—		—		(34)		(34)
Net income (loss) from continuing operations	112		119		(113)		118
Less: Net income attributable to noncontrolling interests included in continuing operations	—		2		—		2
Net income (loss) attributable to KBR from continuing operations	$	112	$	117	$	(113)	$	116
Supplemental Disclosures:
Depreciation and amortization	$	29	$	7	$	7	$	43
Purchases of property, plant, and equipment	$	(7)	$	—	$	(1)	$	(8)


	Three Months Ended September 27, 2024
Dollars in millions	MTS		STS		Corporate		Total
Revenues	$	1,406	$	531	$	—	$	1,937
Cost of revenues	(1,226)		(421)		—		(1,647)
Gross profit	180		110		—		290
Equity in earnings of unconsolidated affiliates	9		18		—		27
Selling, general and administrative expenses	(73)		(25)		(42)		(140)




Other	(2)		1		(3)		(4)
Operating income (loss)	114		104		(45)		173
Interest expense	—		—		(37)		(37)
Other non-operating expense	(1)		—		(1)		(2)
Income (loss) from continuing operations before income taxes	113		104		(83)		134
Provision for income taxes	—		—		(32)		(32)
Net income (loss) from continuing operations	113		104		(115)		102
Less: Net income attributable to noncontrolling interests included in continuing operations	2		—		—		2
Net income (loss) attributable to KBR from continuing operations	$	111	$	104	$	(115)	$	100
Supplemental Disclosures:
Depreciation and amortization	$	26	$	7	$	8	$	41
Purchases of property, plant, and equipment	$	(8)	$	(1)	$	(3)	$	(12)


	Nine Months Ended October 3, 2025
Dollars in millions	MTS		STS		Corporate		Total
Revenues	$	4,286	$	1,615	$	—	$	5,901
Cost of revenues	(3,742)		(1,299)		—		(5,041)
Gross profit	544		316		—		860
Equity in earnings of unconsolidated affiliates	23		140		—		163
Selling, general and administrative expenses	(224)		(96)		(115)		(435)




Other	2		—		(3)		(1)
Operating income (loss)	345		360		(118)		587
Interest expense	—		—		(121)		(121)
Other non-operating income (expense)	(5)		2		(2)		(5)
Income (loss) from continuing operations before income taxes	340		362		(241)		461
Provision for income taxes	—		—		(116)		(116)
Net income (loss) from continuing operations	340		362		(357)		345
Less: Net income (loss) attributable to noncontrolling interests included in continuing operations	(1)		5		—		4
Net income (loss) attributable to KBR from continuing operations	$	341	$	357	$	(357)	$	341
Supplemental Disclosures:
Depreciation and amortization	$	88	$	21	$	20	$	129
Purchases of property, plant, and equipment	$	(18)	$	(1)	$	(5)	$	(24)
Total Assets as of October 3, 2025	$	4,494	$	1,116	$	1,039	$	6,649


	Nine Months Ended September 27, 2024
Dollars in millions	MTS		STS		Corporate		Total
Revenues	$	4,047	$	1,555	$	—	$	5,602
Cost of revenues	(3,544)		(1,250)		—		(4,794)
Gross profit	503		305		—		808
Equity in earnings of unconsolidated affiliates	25		72		—		97
Selling, general and administrative expenses	(199)		(72)		(119)		(390)




Other	4		—		—		4
Operating income (loss)	333		305		(119)		519
Interest expense	—		—		(100)		(100)
Other non-operating income (expense)	—		1		(11)		(10)
Income (loss) from continuing operations before income taxes	333		306		(230)		409
Provision for income taxes	—		—		(107)		(107)
Net income (loss) from continuing operations	333		306		(337)		302
Less: Net income attributable to noncontrolling interests included in continuing operations	—		3		—		3
Net income (loss) attributable to KBR from continuing operations	$	333	$	303	$	(337)	$	299
Supplemental Disclosures:
Depreciation and amortization	$	71	$	19	$	22	$	112
Purchases of property, plant, and equipment	$	(23)	$	(3)	$	(10)	$	(36)
Total Assets as of January 3, 2025	$	4,534	$	1,182	$	947	$	6,663


	October 3,		January 3,
Dollars in millions	2025		2025
Unbilled	$	547	$	525
Trade & other	575		541
Accounts receivable	$	1,122	$	1,066


	October 3, 2025
Dollars in millions	International (a)		Domestic (b)		Total
Cash and cash equivalents	$	189	$	204	$	393
Short-term investments (c)	16		9		25
Cash and cash equivalents held in consolidated joint ventures and Aspire Defence subcontracting entities (d)	121		—		121
Total	$	326	$	213	$	539



	Nine Months Ended
	October 3,		September 27,
Dollars in millions	2025		2024
Amounts included in project estimates-at-completion at beginning of fiscal year	$	104	$	74
Net increase in project estimates	64		53
Approved change orders	(128)		—

Ending balance of amounts included in project estimates-at-completion	$	40	$	127
Amounts recognized over time based on progress	$	33	$	112


Dollars in millions	October 3, 2025		January 3, 2025
Term Loan A	$	995	$	1,006
Term Loan B	985		993
Senior Notes	250		250
Revolver	395		345
Unamortized debt issuance costs and discounts	(21)		(25)
Total debt	2,604		2,569
Less: current portion	46		36
Total long-term debt, net of current portion	$	2,558	$	2,533


	Revolver, Term Loan A-1 and Term Loan A-3
Consolidated Net Leverage Ratio	Reference Rate (a)		Base Rate		Commitment Fee
Greater than or equal to 4.25 to 1.00	2.25	%	1.25	%	0.33	%
Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00	2.00	%	1.00	%	0.30	%
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00	1.75	%	0.75	%	0.28	%
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00	1.50	%	0.50	%	0.25	%
Less than 1.25 to 1.00	1.25	%	0.25	%	0.23	%


	Term Loan A-2
Consolidated Net Leverage Ratio	Reference Rate (a)		Base Rate		Commitment Fee
Greater than or equal to 4.25 to 1.00	2.13	%	1.13	%	0.33	%
Less than 4.25 to 1.00 but greater than or equal to 3.25 to 1.00	1.88	%	0.88	%	0.30	%
Less than 3.25 to 1.00 but greater than or equal to 2.25 to 1.00	1.63	%	0.63	%	0.28	%
Less than 2.25 to 1.00 but greater than or equal to 1.25 to 1.00	1.38	%	0.38	%	0.25	%
Less than 1.25 to 1.00	1.13	%	0.13	%	0.23	%



	Nine Months Ended		Year ended
	October 3,		January 3,
	2025		2025
Dollars in millions
Beginning balance	$	192	$	206
Equity in earnings of unconsolidated affiliates	163		107
Distributions of earnings of unconsolidated affiliates (a)	(124)		(202)
Payments from unconsolidated affiliates, net	(10)		(9)
Return of equity method investments, net (b)	(82)		(36)

Foreign currency translation adjustments	4		(2)
Other (c)	(39)		128
Ending balance	$	104	$	192


Dollars in millions	Accumulated foreign currency translation adjustments		Accumulated pension liability adjustments		Changes in fair value of derivatives		Total
Balance at January 3, 2025	$	(320)	$	(655)	$	29	$	(946)
Other comprehensive income (loss) adjustments before reclassifications	66		—		(6)		60
Amounts reclassified from AOCL	—		3		(13)		(10)
Net other comprehensive income (loss)	66		3		(19)		50
Balance at October 3, 2025	$	(254)	$	(652)	$	10	$	(896)


	Three Months Ended October 3, 2025					Nine Months Ended October 3, 2025
	Number of Shares	Average Price per Share		Dollars in Millions		Number of Shares	Average Price per Share		Dollars in Millions
Repurchases under the authorized share repurchase program	2,024,772	$	49.37	$	100	5,943,915	$	50.12	$	298
Withhold to cover shares	2,037	49.83		—		118,964	49.07		6
Total	2,026,809	$	49.37	$	100	6,062,879	$	50.10	$	304

	Three Months Ended September 27, 2024					Nine Months Ended September 27, 2024
	Number of Shares	Average Price per Share		Dollars in Millions		Number of Shares	Average Price per Share		Dollars in Millions
Repurchases under the authorized share repurchase program	117,066	$	64.04	$	8	2,455,421	$	62.71	$	154
Withhold to cover shares	20,237	64.10		1		215,648	59.73		13
Total	137,303	$	64.05	$	9	2,671,069	$	62.47	$	167


Dollars in millions	Notional Amount at October 3, 2025*		Pay Fixed Rate (Weighted Average)		Receive Variable Rate	Settlement and Termination
March 2020 Interest Rate Swaps	$	400	0.89	%	Term SOFR	Monthly through January 2027
September 2022 Interest Rate Swaps	$	350	3.43	%	Term SOFR	Monthly through January 2027
March 2023 Interest Rate Swaps	$	205	3.61	%	Term SOFR	Monthly through January 2027
March 2023 Amortizing Interest Rate Swaps	£	105	3.81	%	Term SONIA	Monthly through November 2026
September 2024 Interest Rate Swaps	$	200	3.27	%	Term SOFR	Monthly through August 2027
April 2025 Interest Rate Swaps	$	270	3.39	%	Term SOFR	Monthly through August 2027
April 2025 Forward Interest Rate Swaps	$	150	3.38	%	Term SOFR	Monthly from August 2027 through December 2030



Consolidated Results	Three Months Ended

	October 3,		September 27,		2025 vs. 2024
Dollars in millions	2025		2024		$		%


Revenues	$	1,931	$	1,937	$	(6)	—	%
Cost of revenues	(1,661)		(1,647)		14		1	%
Gross profit	270		290		(20)		(7)	%
Equity in earnings of unconsolidated affiliates	70		27		43		159	%
Selling, general and administrative expenses	(149)		(140)		9		6	%





Other	—		(4)		(4)		(100)	%




Operating income	191		173		18		10	%
Interest expense	(39)		(37)		2		5	%

Other non-operating expense	—		(2)		(2)		(100)	%
Income from continuing operations before income taxes	152		134		18		13	%
Provision for income taxes	(34)		(32)		2		6	%
Net income from continuing operations	118		102		16		16	%
Net loss from discontinued operations, net of tax	(1)		—		(1)		n/m
Net income	117		102		15		15	%
Less: Net income attributable to noncontrolling interests included in continuing operations	2		2		—		—	%

Net income attributable to KBR	$	115	$	100	$	15	15	%


Purchase Period	Total Shares Repurchased (1)	Average Price Paid per Share		Shares Repurchased as Part of Publicly Announced Plan	Dollar Value of Maximum Number of Shares that May Yet Be Purchased Under the Plan



July 5, 2025 - August 1, 2025	32	$	46.43	—	$	552,079,064
August 2, 2025 - August 29, 2025	2,025,406	$	49.37	2,024,772	$	452,119,573
August 30, 2025 - October 3, 2025	1,371	$	49.32	—	$	452,119,573
Total	2,026,809	$	49.37	2,024,772	$	452,119,573


Exhibit Number						Description










10.1+						Resignation, General Release and Settlement Agreement dated July 8, 2025, between KBR and Byron Bright (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K filed July 9, 2025; File No. 001-33146)

*10.2+						First Amendment to the Amended and Restated KBR, Inc. 2006 Stock and Incentive Plan (a s a mended September 17, 2025 )

*31.1						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*31.2						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

**32.1						Certification Furnished Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

**32.2						Certification Furnished Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

***101						The following financial information from this Quarterly Report on Form 10-Q of KBR, Inc. for the quarter ended October 3, 2025 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Shareholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text

104						Cover Page Interactive Data File - formatted as Inline XBRL contained in Exhibit 101




+			Management contracts or compensatory plans or arrangements

*			Filed with this Form 10-Q

**			Furnished with this Form 10-Q

***			Interactive data files


KBR, INC.


/s/ Mark W. Sopp						/s/ Jennefer T. Taylor
Mark W. Sopp						Jennefer T. Taylor
Executive Vice President and Chief Financial Officer						Vice President, Chief Accounting Officer


/s/ Stuart J. B. Bradie
Stuart J. B. Bradie
Chief Executive Officer