Alison Vasquez Vice President of Investor Relations
Stuart Bradie President & Chief Executive Officer
Mark Sopp Executive Vice President & Chief Financial Officer
Jasper Bibb Truist Securities
Michael Dudas Vertical Research
Andy Kaplowitz Citi
Sean Eastman KeyBanc Capital Markets
Zane Karimi D.A. Davidson
Ashok Sivamohan Goldman Sachs
Call transcript
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Good day and welcome to KBR, Inc.

Third Quarter 2021 Earnings Conference Call. This call is being recorded.

As a reminder, your lines will be in a listen-only mode for the duration of the call. There will be a question-and-answer session immediately following prepared remarks.

at instructions receive will that time. You

remarks the call opening Please ahead. and President, introductions, turn to go like would over Relations. I Investor For to Vasquez, Alison

Alison Vasquez

XXXX you KBR's Good for and thank third morning quarter earnings call. attending

to available call me earnings from views Executive outlined and significantly the Chief statements. forward-looking risks and at on will then KBR's risks on the on and Financial from quarter Mark President their Mark are presentation and as These the President These Officer; our Officer. the Vice most and are I Stuart includes website. discussed of X. available Bradie, on for now Executive will results section Joining Today's matters over our today XX-K This involve Chief kbr.com. performance and turn could is events recent forward-looking call your differ future Stuart Slide Stuart. our questions. that Sopp, reflecting cover Form and these potential about statements, uncertainties in Investors open highlights website impact actual discussion to cause

Stuart Bradie

Thank I Slide and on will this X. you, us morning. start thank you for Alison joining

may Report commitment. our you we of some which XXXX progress Sustainability aware, As our last and released our be ESG highlights week continued

be As to such, the touch thought it timely highlights. I would on some of

could. if So we starting side, the on right-hand

the climate ceiling. more close viable workflow, behind change real to is, a with sustainably these incredible I really revenues for but It's investment citizen. aligned alignment bottom to strong commitment that the matured middle In things of of And I loop. are zero NOAA I floor commitment is technologies making to forecast. But circular degree read think the in good the factors efficiently impact believe suit for to as meet in really clients think of believe business the bringing a to being website sum, in there. our climate USGS. comprehensive I the have doing the our to citizen about carbon high neutrality, and Really, science the believe, good net and reality clear with encourage bottom ESG, around today. and the we social stakes I great capabilities reward at looking are not in work to commercially leadership it's examples about we It's market. the and focused firmly that would highlight aligned changing XXXX in demand green our solutions energy growth the of highlight is there about advancing pretty left, like mix have examples in corporate this, some of the our about governance the world's and to course, capabilities to some ongoing our progress the zero strong we the today differentiator the or and independence our you plastics and think the operate shareholder KBR XX% a the visit elements The Board, operating and I you with it's value And circles culture divesting change. our KBR's listed net our of growing corporate made is, report. about with areas. table all CAGRs really And new being know, strategic good a executive we in

combination quarter at well increase. business in And expectations. or up Allies our above the target Afghanistan. and an the delivering is OAW Operation XX%, XX%. significantly and Yes, performed this exceeded X but at highlights. again I sustainable Slide tax and helped core It's Revenue a by to of across quarter fantastic margins been on businesses. operational maintained the We obviously and or strategic. we quarter a board, all acquisitive focus financial, Welcome, was was the From The outperformed. XX%. hit organic That's XXX% Now, metrics: U.S. growth year-to-date. the so. is in revenue with up or XX% also has It's Afghan the our the is services assist and and The covered both really tech cash government also. growth EBITDA especially just to across more impact XXXX. and quite up conversion of helped what which out number, after EPS again, volume commoditized and exit of discipline perspective, looking that in an our rate in our as impressive from came rate is, mission, DoD nationals given a the XXX% they

I that about recompetes combination our of work landed team new on think shortly. consistent, business model nice some not quarter, and awards attractive give billion the and are $X.X us cash I'll only of course, the of and options they, in a options. The touch fundamentals of

this cover this Mark by on Now billion later. significantly magnitude of will more about and understates the figure award $X around OAW the almost

remain win For green across Forward growth projects event year: this growth our just that the highly sustainability the provides now, earlier our targets say and engines towards and ammonia, I'll us we and advancing more, investor XXXX laid at cyber, doing the Future team important, continues digital solutions continued This, momentum client's to missions objectives. out strategic unchanged. which our course, important of work

indicated of we a and concluded client our the As deployment enhancing complexity settlement and thus Ichthys, on uncertainty quarter, removing optionality. capital we last

plant starting combined arbitration April Our are recoveries the in the XXXX. next pursuit not and of affected associated the of power monies the with with continues cycle

XXXX once we will shortly. guidance and Mark through more you are that So this, walk for with full raising all year

of inspiring. we up, commitment with mission delivery all pleased So very are be and to must our and the people's is we the the strength

QX. quite thank So market a And them. to shout-out The government outlook you Slide similar a on and in big X. to to big and remains

of to to KBR's no on aligned new remain will so priorities, much positioning, suspect awards if right. change the National I continues through the there. discussion some QX, strategic course, CR course, and then move security of defense real Of however, continuing the budget. resolution is the

an the in to grow highlighted the complete in tip And above areas Australia call U.K. three the we're and that more the hat book-to-bill await amazingly right. well, we isn't We've on awards XXXX. we and which doing expected U.S., a just in increased continues moment. prioritized as And with on perform up Frazer-Nash opposite of in hold Outside However, norm and the well Frazer-Nash the closed pretty on our well. expect spending do Australia. have early should work catch-up a associated the without earnings to the this in to and OAW

I strategy. around think differentiated, themselves: the and cyber first course, bang-on high-end, for future-focused two of and speak technically IT

listed, multiple many many U.S. And awards, at to is a thousands sites mention. The and the we've actually them This third children. deliver direct LOGCAP requires special humanitarian of across V Quantico. via then, established of accommodate again, a and award the displaced Navy to Afghans, significant separately Europe the to mission

security. To is people, client, within and not together do the medical responsible screening done to or clear, a KBR critical accelerated with massively lift Our have facilities herculean timeline. be establish and a to heavy for infrastructure continue

this from For again shall the be make proud are huge people visibility more few us, supply happen. A we at all It's is very will humanitarian task of. and the over significant KBR shout-out chain our have the and this order mission to but extended a input likely for one purely the next we months.

for So GS priorities positive. aligned XXXX rest the the with of and positioning an 'XX opposite Frazer-Nash, budget in market Australia, moving into very outlook short, across inclusion OAW, the of is

imbalance, X Slide is in winter. ways, course, very factors sustainable for delivers and changing development. see This, to so restart decarbonization, the transitioning efficiency, from projects prices solutions, this positive services. increase talk increase increased key similar and for investment to as companies very demand particularly our allowing we'll technologies and we key increasing recognizes oil demand I of as guess shift, into in outlook to the QX positive QX in to the energy oil the mix projects, outlook being similar our but with and many output with tech sustainable gas We particularly in move The technology. on Now and government about for to and for outlook one development. the capital them sustainable combined themselves, gas profits ongoing energy supply-demand

hydrogen, project K-Green like technology a highlight our and a technology-led to highlighted across demonstrate combines is on We is team ammonia clean that plant. real commercial-scale proprietary three weeks plastic moving The solution. green There's a ammonia, of be been to operational announced momentum with think for the take really see client in just big these project This brag is XXXX. client's solutions industrial uptick renewable forward expertise exciting. is deliver little olefins, very ago. in moment the opportunities ammonia solar awards world's capabilities a a the energy we and we very, the with to a first renewable expected This cool to refining, that couple another our I'll and continue themes. recycling. project bit. It's this clearly great I'd here what area be green to facility insight will and in

a CapEx profile our of that batting highlighted those the attribute in of lower and end have I tenacity people team XXXX, carbon see there here. can a our O&M far quality of that opportunities you wins one ethylene result and brings come great of project technology investment, commercial-scale projects, And footprint. winning excellent focus customer our of So the all market. flexibility, have product to thousand, lower course, that and fantastic lower three is three to been those But

very we the XXXX. move positive as So is STS into expected demand outlook increasing and is for

to on positive resulting So awards in Slide us are those this strong resulting you where takes and all see bookings a robust X, pipeline. that in nicely can

$X.X positive the brings positioning, phase of lots $XX options confidence that the our very the down the can and billion You outlook coming company's strategic numbers in robust indeed is proposal our and in scale with quarter strategy. that all The growth negotiation and awards billion overall aligned pipeline in pipe. and our talk, are see the of with into

deliver update XXXX Now we secured long-range the you an to amount give XXXX and have of have on our targets. we'd on promised we in to hand work

across excludes assumed those has recall Investor revenue of to from you years. and of in that Day If business of XX%, X book That XX% book that grown OAW. Today, curve X-X% same about coverage March about uptick coverage CAGRs business our over the X%. our reflected XXXX, number at

here markets As attributes. track the we businesses continued great record. think attractive a with capable We those is a build have progress said, very to in our demonstration stable, strategy is business predictable development of

behind we is targets. stand XXXX So our that bottom line

advisory and high-end and XX. Now in renewable their firm, compelling technology, on clean of of step capabilities team business, of sustainability Frazer-Nash. the addition further suite to KBR's The our this Slide change It solutions delivering Last in differentiated we into systems Australia. if delivering perfectly consulting and assurance. more, announced in and and the ESG a objectives. and What's mission-orientated of their aligns the absolute commitment closing U.K. recall, you extends engineering mission to primarily supports capabilities. evolution week, an Frazer-Nash, technology-enabled high-margin, high-end systems talented our KBR's reach is helping principles with our sectors accomplish technically of to and energy is customers

be welcome about in approximately KBR high-teen couldn't is government $XXX our business $X.XX and adds revenue million accretive Frazer-Nash here, be EPS. to outlined into margins in more the of family. to group to at We this adjusted expected pleased XXXX As

hand I'll to Mark. Now, Mark? over

Mark Sopp

Stuart, And do. usually I which again. pick lays I financial our Slide on up metrics, XX performance once will Thank key Great. as you, out

to expand to get make However, a the Operation in few role Welcome before just the on comments I OAW. Allies like numbers, to program, our I'd

that a has As We you for the is environment these who provide to in those our transition and good our missions. our time. nation them KBR upon forces allied honor and there to to a with East supporting by side-by-side in activities it's under be stood very military called a it again this privilege been out environment know, Middle heroes operation. for once long help duty We aided in of during involved think those

quite financial proud while need. matters build request of As matter and our do thing An quite needed our impact of to the we're here difficult proud our here fact, of Afghan this are today continues really tens sort is second fiddle we to is are days, critical just that guests this numbers, to our well. Defense. who this, important at role in part And to KBR effect tremendously is briefing of a us. the to everything thousands results communities of provide KBR dropped in noticeable of there Department we say to What when employees of in of precursor literally that of is hosting the this

on as saw might year-over-year were again healthy once as down revenue summarize contracts. includes driving in over still with track in above grew Margins Now all already at few is above emphasize to this. contraction XX% target. XX%, at performance OAW, this business STS or you EBITDA business, points. as terrific our our result. growth slightly was on single a digits, the I'll revenue QX. and that legacy Adjusted Sustainable year-over-year but and was performing or at QX we expected. were much Stuart at a course, XX% ramped OAW of reimbursable did parts plan. is being of It for organic government tech XX% low core of Margins including expect. corporate government

built So for cash contributions bang to our Stuart Quality our to XX% generation and KBR results alluded earlier, up Adjusted is XX% EBITDA value expected. benefits book of strong accretion. Stuart orders what cash target. this covered in billion toward margin QX together, $XXX Great Stuart course million consistent only $X.X and under the whereas I'll as that conversion bring. options has about work of over for year. adjusted in see, the the taxes and as the buybacks note the from Picking $X.XX earnings jurisdictional contracts, And our EPS would with the consistent helps OAW million operating million cash $XXX versus practice by of overall under growth, in QX. OAW about of enables was you bookings. company QX amounted quarter. debt, backlog of in year-to-date. X%, some Frazer-Nash to on healthy will favorable cash for in the mix that's a funded boosted flow bookings significant does and IDIQ to blended QX just of reflect quarter that and up to last flow and remained acquisition to on $XXX measure, which not this for is full amounted task Because actual from say, impact

our Slide as the up for We XX. for associated expect $XXX Accordingly, uptick billion million-plus revenue results, is together segment guide. to another $X.X QX QX our with funding Onto incremental set in well. bookings tying strong

is to reflects the really and ongoing OAW That's growth For driver, we've of Forces, Todd after and with health OAW programs existing and business while work, as excellent inadvertently helped launches well year. All Centauri contract engineering X%, overall Achieving ISS on this line is was O&M team. and by in work in for million cyber intel's advanced winning government, from latter important urgent XX%, and and footprint won important category top contract. both revenues quarter, was expanding to projects, strip our the wellness when this areas, down XXXX across growth we remarkable off as the Space systems business delivery Special this managing a and out and on unit capabilities XX% Ongoing doubled several growth which $XXX almost of is once contracts. launches in margins contributing on were our each also growth a particularly associated work up example business, performance OAW was This this large is May's growth contingency unit space core was front, need Science organic. part, and track advancing while human hitting program new four you a Defense cylinders, and XX% based, International to all major amazingly, day space units GS professional XX%. from great cyber organic. keeping also that all you've soldiers. we've this on integration health work seen. East grew EBITDA maneuvers, again. and sustainment really of in for $XXX winning business on contingency and about Middle and massive last almost that on This write some every business. grew course twice see the when supported recompetes the including was team successful growth made science that in revenue, in mission foreign ticked East announcements QX, knocked Quite its has million as commercial our readiness docking the They and the Middle its well-publicized the organically. the pace need safe. Station testament recognized over also NASA it thus the for summer. as fantastic the

dilutive OAW percent. for work to overall in QX. We'll is STS; track that with bottom the on earlier, earnings Over take effect the to program mentioned X% and As dollars growth dilution from margin lower-margin the gladly the remained even and top brings margin for core the of GS quarter. lines margin

this force quality The are across that spend was leverage were the seasonally investments the XX. going and led and to Net plant our team our also customers all are bookings technologies pro the in at to will with to of KBR superb safer with leverage about recycling really Slide scalability X.Xx forma and our infrastructure On positive acquisition cash it capital our up the nudge drives closed making the a to around in operations bookings EBITDA matters government hallmarks was creating of Corporate awards expected, While green provide also remote X.Xx generation. were base. September towards the increase strong as mid-October. cleaner reflecting and digitally team to brand. sustainability bolsters Frazer-Nash to And low, client plastics greater reduced ammonia, this we and world. in forward. enable continues year-over-year XX as on Net we growth scale and select continued commercial on

flow, As pleased $XX margins, corporate carry upgrade actions BB the we a up where derisking strong occurred as and started increased ratings liquidity cash affords cost flat now a about on settlement, a good of million. scale, buybacks year, see This to record quarter, about going Ichthys notches rating, from mentioned is where this options positive credit from that track quarter and were KBR's forward. to legal years another ago. significant this derisking result three BaX that capital full earlier, excellent The a this development two have a The amounted was continued we perspective. we event which major deployment us Stuart more

As such, our that update in QX our on coming our in on that latest views capital structure will report 'XX. early the we optimal you review will in months and we issue

Now guidance, XX. on Slide to

our guidance all updating As with favorably Stuart and as reflect significantly other things also the said, we're impact OAW, effectively from to planned.

time magnitude As in this period stunning. Stuart summarized the quite a is of of effort short

it guidance through X%. is To or work. This guide came reducing can taking increased are range Thus, tax our margin to healthy OAW raising adjusted million scale new flow type mobilize fiscal by quarter, rare GS clearly are earnings higher serve of of last Of a is jurisdictional $XXX impact upon. our share margins revenue the when to midpoint quarter. delivering performing a QX is our $XXX above at of this $X.XX or at very rest this increase, originally are for over increasing in to on together, low as the this margins. be consolidated $X.X the mix. rate STS at the million cash government than guidance quarter terms and from we that we're of to expected After by this team per $X.XX as We at adjusted XX% EBITDA keeping called are revenues. a guidance better for $X.XX. has for If second one to single in million. a contracting the this expect digit, would turn, space, 'XX unchanged a raising clear, billion this $XXX work OAW are from roughly in favorable the U.S.-based, guided in because testament Also year and we rapidly

OAW when While volume this will and cash net into is produce timing returns all lead up the of bump said spilling year. flow to items next from done, this could

imagine, to cost-reimbursable support we will to can many continue are you and conduct this fully in turn, As customer procurements our activity invoicing a have and on basis.

and ultimately to it can it's That will may between items Thank benefit net timing and land the as closing. completes the Stuart back assume customer to XXXX. think chain supply manage cash prudent in We but we turn best on for we our my remarks you. I'll our

Stuart Bradie

you, we and a will fairly I a Excellent job this do arguably, wee theme what here Thank Mark. consistent XX on said and bit we doing as would ever. finish more. quarter, Slide

one fact, banger. a profitability, excellent outstanding in excellent quarter, could An excellent mission margin delivering say conversion. Another absolute growth, strong the results, cash exceptional on performance focus and

following We the deployment optionality. raising this And guidance increased have capital in QX, guidance we and are quarter. reduced earnings cash and increased revenue risk

Our will we positive with for the into the operator, and and back in beyond. hand markets who now up XXXX open fundamentals call look as bookings continues And I good end will questions. momentum our very to


first Tobey Instructions] from question with take our Sommer [Operator Securities. We'll Truist

Jasper Bibb

on Hey, Bibb Jasper good morning. Tobey. for is This

the the quarter, ask, that segment? but program So in I potentially wanted performance your to mentioned during Welcome some shifting other you the negatively work readiness Afghanistan excluding did Allies sustainment, in withdrawal, to quickly the support of impact and strong resources

Stuart Bradie

to the Good that did I supply on question. work Welcome answer of Allies I no. is all driven really is chain. mean by mean - the we the

doing that mobilized personnel historical I and of people, infrastructure number we etcetera, establish never course, a the we deployed guess, out we've subcontracted in it Afghanistan. And lot I were we really, equipment, required. came of, obviously, to a the so brought of, And to was work that guess, Iraq in of and

deploy. had those people to readily we So available

not all. did it us at negatively So impact

Mark Sopp

growth Ella team organic produced of OAW. and really that add great outside just I'll

Turkey they in dutifully Spain continue to training in support in European work the up and well. summer to the program other there. said They we in ramp overseas exercises over as that all the and work the NORTHCOM continue on in remarks, As Command

So well. really that of outside a remarkable as OAW growth activity

Jasper Bibb

And to this press announced. A follow with of you the also around just with a great. That's on then new wanted lot plant Yes. technology ammonia that green Aramco up contract announcing ACME this pipeline week. I mean on - how for the your could green all what think ultimately RFP comment solutions you looks large these you opportunities may for just do ammonia like and be?

Stuart Bradie

got in I studies imagine, lot a as to you look mean sustainability we've their of organizations ongoing as this can area, drive agenda.

the buoyant. very it's progressing. at like think guess may projects go, real, we're pleased. I I So various is But market of That to funded looks the levels very it's it's maturity. it's the and different first are

front first-mover lot the foot in being this I of the these in getting the think actually And is think of is done. because on been talked being a front that's I about strategic. and projects queue advantage So have this - but extremely one

increasing going we're to these get activity So, as think I see out. proven

So we gray, I the as solutions green that produce plants, at ammonia and being greener sort etcetera. combined combination I ammonia what guess, look from call existing blue we more of, think to of

to a year. in time. be over going a to not going one come multi-years. a good it's going It's It's market period think progression everything quite through I is of be to

really, So in. for position to KBR good it's really a be


Research. Vertical We'll next Dudas Michael take our from with question

Michael Dudas

Alison, Stuart, Mark. morning, good Hey

Alison Vasquez

Mike. Hi,

Michael Dudas

can in how of more remarks different, ready money flows through Huckleberry up to a are is reduce overseas or to are your mention some - about to like catching mentioned of how drive and in on on that improve your forward but years. prepared gas, bit this about especially to facility and spend. spend or - you catching think move customers about that to side efficiency, that prices decarbon, couple on going your as how Stuart, differently etcetera, the - roof? go thoughts up the plays share extraordinary the how some you're LNG little in technology improvements, energy certainly cash Gold, improvement maybe you efficiency I'm going because maybe lead customers maintenance the how more like next and leverage we through maybe So on didn't in just kind to relative prices curious forward of to your

Stuart Bradie


to think it's moment national with and I have that be able revenue able of cash guess, the many question I to the repurposing in future. think product I with looking prices gas considerably. the eternal that the I sort And at different guess, companies in international invest suspect future. increase mixes And the at to sustain of suit to be oil I to, is they the that and refineries helps oil be they'll and,

strength, seeing marking you'll our and solutions. arena in TLIS their particularly think we're lot getting footprint assets to as in see around carbon in a a remote lot around know, of current of energy-efficient our as investment I you them more reducing activity that brownfield which plays

I think a it's Mike. So balance,

and And sort would need the their more far getting income they I that, maintain the to think admit assets assets, that of but future, then coming generate in mixes petrochemical, themselves for while lot with a that. oil the maintaining at sustainable. And the them companies we've to efficient those and green example. more technologies talk of and product obviously, help that more through that are of look got

So to the But that's think, I of it's going I it's different out. for companies. play think solution, ultimately, way I going those be each a think to

well same as we're well the very they And invest we're I assets guess, the and making at efficient. solutions energy for existing that. guess, very in time, more to positioned help newer the course, I So with, for of them of, decarbonizing technologies think sort future, I positioned and newer

think I and come So increasing prices And it's under CapEx a sorts we as oil these us will and think upward gas of OpEx. nice winter into balance move for well. - it's pressure I as of

Michael Dudas

follow-up is Frazer-Nash. And my No regarding question that. about

more and guess maybe that you the the, next As past a other and some over side for some expertise? can robust - acquisition. something do that renewable say, maybe several how the announced Australia? can through it this synergies the are that in? throughout through years, the of - U.K. closure of And the parts of and But you energy month, is leverage you fitting as to some I went which technology, get how see But the process growth that of - technology internally on you we the areas given opportunistic revenue the very

Stuart Bradie

Australia. with of mean points, in folks terms process been and I'd it first that really spend the investment, the the in an that's actually with the truly I It's we defense future I really changes renewables in at the their high-end particularly into what moment, in sort at just Brexit, but not U.K. U.K. and It's don't modernization, U.K. obviously, say area has that's fantastic going the - capability in cyber. of think, engagement this understanding to at, Yes. space. the government looking the and as of through in is where, with the etcetera. whole do opposite in play evolution to And looking Frazer-Nash the

similarly build is make high-end I an the and having amazing upon of there's think us. is business decisions a change think that already. we're completely in for to help to really what I there the a doing those consultancy and MoD U.K. I And think So in coming Australia lot opportunity U.K. strategic

capabilities. first consulting hydrogen capability things as the in of like world, what think then aware. features they second KBR capability and they would everyone I the call really is nuclear in cadre bring come that's and which do So wind the is and engineering a part. with renewables I solar heavily augment our that in advisory But And capability of the areas part

what's you're have around a broader when strategy So I or or we how think now geography decarbonize there's can that certainly regard. environment a companies good I and their and synergy for in they advising, infrastructure, guess, particular about governments offering significant far constraints

think - I it really So X that dovetails and got we've well all overlap. absolutely

our technical So the in traditionally think from really broader were the wheelhouse. it's I a about talking enhances Frazer-Nash that MoD U.K. capability all when brings additive. And resume that to KBS capability we're programs tie-in

of a I consequence up a that. So P-win would think as go

think is, about more our does in us takes of think where - super and the really Frazer-Nash environment. So evolution strategic of the exactly really add spend the transformation up, more and and in sort sort what I all this about you it the excited that's higher-end, for if U.K. services we're U.S.,

terrific really really, So acquisition.

It to do very figuring tricky. came what think to for to opportunity forward. valuable right. it strategic us we this asset out secure market going to - is and do something we wanted it's going how the was be it a quickly move and You're to market, And but to took came was we


Kaplowitz take from our Citigroup. We'll question with next Andy

Andy Kaplowitz

Solutions? Government we exclude the you're a little we so discrete, from give and And shift it's you do trajectory can of big that. right here color 'XX, Can to know thinking but not revenue as it's more into OAW growth into given I underlying about how

it So the to you Mark, But tax Stuart being some X% go I or to you right. how X%? about gave You I the into are who 'XX. 'XX, into projects mentioned talked thinking moving forget it about as we mentioned us, think but

does then And ex-OAW? 'XX into growth into the see 'XX? you OAW last do how So

Stuart Bradie


we amazing how mean it's It's happened of that kind running have undeterminable. job And done think and OAW right expected up the quickly. just and an sustaining. don't will - We much long the know. been We've facilities these I very think I it's now, last. very teams it - getting question, all I

And we've into progresses - we'll direct get around as the think obviously, year. I as have next that. year-end, that a of So sight and the to line year-end closer we more got visibility to

need park we sort probably a that a - bit. - So probably we of it's that's I think to question little

you terms I - there I you confident is number stage year. this will at amounts underlying considerable want we'll can give our difficult of to don't of you I that be around trying year. that quite move next And be into my an to some in think that. will this out be like, if skis and think get in up-guide, But to over

across performance our and the you GS the has it, core separate absolutely delivery segments has as in digits that exemplary. when business the OAW, think, the in growth performance in Mark of of double terms - right business, the has would of we well the think call all out terrific. In very, margins. saying occurred We're The I I was been been of

prepared might those remarks. stand long-range and my of terms said I we very our in well So behind that much in as targets,

think I mean, you're I So right.

should I think in forward. be discrete going is is and on wash that I increases we which do - obviously, impact given the out think, It's we large and I'll margins, OAW. the And separate optionality KBR deployment so obviously, for and has will positive, that something cash why etcetera. that very an scale around its but

performing if so long-range with worried And slide about Investor very talking you I upon that little you'll of graph slippage our I to in to core And our since about those any And in that slipping backlog bit like, think, up Day. achieve So our them. targets, significantly awards think back the the think a if far it's we're extremely the to well. - right, change - coverage, we're and you I'll it's of I it's the even business, not but under confident take gone targets. terms the

quality it well the and we're terrific. be is we quality the what with winning margins will So as that of all think associated and

So for that's good answer sorry, a long shape. saying in we're yes,

Andy Kaplowitz

it me. question Well, long was by a

So I appreciate Stuart. that,

stable doesn't And so and chain well in seem tech. is margin just you've discuss and follow-up. cost and slowing your just as could on labor over expectations handling with sustainable of supply work. that focused you down with has quite been It How time your know in dovetailing seems KBR it a been to maybe then be line and maybe that. We But sort pressure?

despite the progress sort there? are make out supply still you of chains, constraints can less So labor that

Stuart Bradie


really cost-reimbursable. lot course, course, we're pressure markets we're terms seeing pressure that tech, side is of we're area. comes protected it. pressure, the what back-to-back. I of of - terms pricing much of in government the on A as And in, we not we're in in sustainable again, pricing do, that too of think the in in And

commercial in So the about terms I'm supply worried chain the not risk. of

extent of supply that years. that numerous with relationship think number worked we've for In got can shape were that COVID, things using even the continuing during Google like to disruption with things do we have really too strong been in manage Glasses that really where we we're that them to - with - no truth. we've on managing like terms And to inspections without in and to and of things suppliers moved a I risk, the And ensure track. I that think with

change think way So, very perspective, risk a good, supply well if manage I operate there's you situations. the these we're I think a that And in chain for the isolated. from like, people to been

We're any complacent our teams think but watch. it. in way we something it's So not I on are


our Eastman take We'll question with next Sean Markets. from KeyBanc Capital

Sean Eastman

my taking questions. for Thanks

just out that would would with numbers and here. think it's next as Allies for I and Maybe sure So Is other appropriate just of in into at just bridge margins year, we've like as think around XXXX. expanding this got that revenue guidance much be about know but yet point time margins careful else got maybe comps GS. out how on kind clearly, juncture to models next be to we've there? Welcome you we and work it's STS harder year we the have mean next there expand I making the Andy's outsized thing not the our that question. year STS. Maybe just for anything what looks And to Operation about to we

Stuart Bradie

still given cycle, looking margins where mean in driving really, STS we're technology positioned statement quite think, that into not I is good on the the next where your going think growth year. within that really I Yes. on actually Sean, business, feel are we're mark. We we the

I don't all. any pressure margins on see downward So STS at

suggest to will that give on we is they as go earnings we trend get next will we'll that, that certainly, that obviously continue. of quality into expectation year. continue guidance up. more Our And But the would secured

off of off still projects guess, as remember, part that So we're - more and the, working I some lesser becomes the a some - of commoditized well. the working and

on So again, puts margins. upward just that pressure

over So we're very course think I we behind will much guide. Investor grow confident. pretty said And incrementally to our that and I think XXXX at think of that, X% that these what annum we we, X% the piece, Day that per stand was the again,

front the had So And we I at good. some breathing that's say, of end. would course,

over As bit little you the we're the abnormal. of well which XX% know, was a at beginning year

the business So move in mid-teens that. of our think we're to I statement and upward we 'XX, very think And billion-plus back business margins around revenue forward. confident as pressure pressure around coming see the for growth, I in line STS to and then the earnings around expansion the $X upward

target, of if very wrong, guide you So around And CAGR year but I around arena I bit, of to don't not just as that able you'll revenue at in be doing OAW love say continue I that. X% the to the what little all around more - in would guiding absolutely X% much. GS it's is up, color terms we're give better XXXX of it past really so said, end comfortable on solid, the me I the get it's beat the we're a we that. sort And we're but to in

there will carry mean I So - be obviously, it will over.

how task into we'll house, some many facilities, to long But question as to many to the today. difficult people how bases, how an a sure of society be really think extended. I that's opportunity for them answer orders many there's for how put

Sean Eastman

just next for out could What scenario what would GS look I It to GS And has fantastic. of as to of we CR upside some mention the of frame year, in procurements just helpful. someone a obviously, joined so breakout apologies breakout-type a then GS? adjudicated? just and just those sort the newer we very function I Okay, types this to - heard surprise be been pushed to what but X? over drive year a dynamic need budget or some of being just for the out. a that with for of wait helpful performance the programs late, And sort momentum things scenario have would Is the

Stuart Bradie

quite to is at to a all quarter and quite I in mean such over XX% I was I mean long how remarkable. increase think we're say embarrassed was amount, OAW. pretty [indiscernible]. by surprised one and surprise. revenue in at that as me I tell mean, a And Mark get his a tenure pace CFO won't I significant your that by But I

well over well those, due have over $X - ongoing, are fair scenario. for know, that of of think that, procurements terms a But of and if is billion. are into many win but share winning like as So you tough. And could double-digit if we that got in award we I breakout we've numbers you our these

we so and a probabilistic of our build we And that's that models. view take how

the not moving the probably do to moment. It's best it's anything to that's way think the timing. of or whatever. things yes, a just terms at to and lost And we've that I like CR with in think right, so, answer lot And the I

I I And into we will we're bookings to will looking at strong there'll OAW quarter nice catch - to have up that, very think start we'll as - can in move a because continue that's these Mark as said. things - very be greatly QX. a So think momentum. help QX, that position in with etcetera,

a, quite unusual position. an yes, but in So it us puts strong


from question D.A. next with Zane Davidson. We'll take our Karimi

Zane Karimi

Mark morning. and and solid quarter good Alison, Hey, Stuart, outlook.

Mark Sopp

Thanks, Zane.

Stuart Bradie

Thanks, Zane.

Zane Karimi

have forecasts the few in business the any first off in like resources, ] So years, are And people you're constraints today next feel you given how today? do place drive here, that? having there around like STS growth [ that for to the work to the you around

Stuart Bradie

think efficient I years a our we're that in that. critical got capability continue worked But many of and too and - need got constraints help to - the it's yes, I most carbon that business. us specialized of ensure that that we're lot things guess, something the not sell they've we mean I very resourced are forefront it's I for No for that. And and technology. at particular a and But much many having obviously think the around most, like process We've very it's around. resources. doesn't we've lowest and footprint work to is It's we IP the things. big

a that quite place And solid to be. is so

and see life's that actually think of the one that doing say, really. things as change think of I part So is great team the - the well that's really And The a of being profile just - the people been has I excited. and - I - experience are part I team proving also super of always work and part out. best in that performance that around business,

don't resources to attrition it's IP. in key that - are our particular I personnel-driven ability given So, And because concerning find not way. in momentum The the difficult. as is it's business too really really rates business not we're say, I think any heavy not a

it's we're again, a - all yes, but it's that feeling think with bit feeling far, talent in very So magnet be we're at - to - KBR journey. mean, not complacent - will ensure I we is much we're that place I terms so good But so a work resource of that a a of that to sense continue fantastic and we'll constraints. in trying

Zane Karimi

STS a time? customer the in evolving Got you. a And with How you seeing notable you major the over utility are announcement segment. with profile work the also made

Stuart Bradie

utility? Major

Mark Sopp

when clarify could you say utility? you Yes. Zane,

Zane Karimi

one. Maybe I'll I misread you off-line. this a about back to release. get

Stuart Bradie

no Thanks, worries. Zane. Okay,


our with [Operator from Goldman question take Jerry Revich Instructions] We'll Sachs. next

Ashok Sivamohan

is Sivamohan for Jerry Revich. on This Ashok

For growth provide Government science X% Can for revenue quarter? organic. the was other the organic the space in platforms Solutions, the you and growth mentioned you for all

Stuart Bradie

so Mark? the those K, we Yes, We in can. disclose do

Mark Sopp

reference I'll bat. off the tell I'll right Yes. you the find here, right

Stuart Bradie

gave we think I readiness and you the growth. sustainment organic

Mark Sopp

readiness huge was Which a it was but number and our XX% sustainment. ex-OAW, for

continues X%. U.K. intelligence was the terrific. The to in international was more X%, was and in which But Australia, well a includes about that piece Centauri, in little really really, about do So defense much flattish higher Australia

throughout. So strong

Ashok Sivamohan

for the heritage can Technology you book-to-bill in Okay. was quarter? Great. what the And tell the business, us

Stuart Bradie

will low, mean start have, Then into people just in X.X on as the around going to particular January. and as of the and that QX contracts money I spend again then X.X. about they commitments always - sign they for tend get the a softer and seasonally year move that guess, Xst X.X. between QX I was they it business, in It budget cycles. Yes,

stronger that book-to-bill that business norm is we'll the business. And and case suggest that So a our that, is for a pipeline the we historical see in QX. - would I that, the have think will been expectation - that's

the of important really quality So winning again, I And think was quarter. we're what the that not work is in actually just concerning. the


I That Bradie closing time, At turn back conference for concludes session. will Stuart question-and-answer to the today's this remarks.

Stuart Bradie

Thank you appreciate. very We you. the could the other And thank know you've listen but taking to morning. thank you and for - you We to places be do this taking for time much time. us got

daggers. is which the on excited is major uncertainty it's quarter guess, opening amazing now shouldn't in it's again, an business all Ichthys No that very and questions where positive in bring because But that, I that, the us behind really heading. terrific Alison's think think reasons up. I issue our sense another giving is very about today the remarks. for described legacy resolved. we're that I And was we me where and I -

good all regard. that So in

for that feeling interest. today really we're we're looking to - 'XX and in Thank a forward you So, really beyond. thank we're good your shape is and continued And you.