In This Article:
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Total Gross Revenue: Increased over 4% in Q1.
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Adjusted Net Revenue: Rose over 5% year-over-year.
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GAAP EPS: Negative $0.10, impacted by a $1.16 loss from investment in Amentum.
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Adjusted EPS: $1.33, an 8% decrease compared to the previous year.
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Adjusted EBITDA: $282 million, a 24% year-on-year increase.
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Adjusted EBITDA Margin: 13.5%, increased by approximately 200 basis points year-over-year.
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Consolidated Backlog: Increased 19% year-over-year, totaling $21.8 billion.
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Book-to-Bill Ratio: 1.4x for Q1; trailing 12-month ratio at 1.3x.
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Free Cash Flow: $97 million for Q1.
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Share Repurchases: $202 million in Q1, with a new $1.5 billion authorization approved.
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Dividend: $0.32 per share, representing 10% year-over-year growth.
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Adjusted EPS Guidance: Raised to $5.85 to $6.20 for fiscal '25.
Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Total gross revenue increased over 4% in Q1, with adjusted net revenue rising over 5%.
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Adjusted EBITDA for Q1 was $282 million, representing a 24% year-on-year increase.
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Consolidated backlog increased 19% year-over-year in Q1, with a trailing 12-month book-to-bill ratio of 1.3x.
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Significant contract wins in critical infrastructure, including the River Torrens to Darlington project in South Australia and the BusConnects Dublin program.
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Strong performance in the Water and Environmental segment, with double-digit revenue growth across all major geographies.
Negative Points
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GAAP EPS was negative $0.10, impacted by a $1.16 mark-to-market loss on investment in Amentum.
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Adjusted EPS decreased by 8% compared to the previous year, primarily due to an unfavorable tax comparison.
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Life sciences and advanced manufacturing segment showed mixed results, with life sciences strong but advanced manufacturing soft.
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Free cash flow for Q1 was $97 million, with a more back half-weighted cadence expected for the full year.
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Exposure to potential federal spending cuts, though less than 10% of business is tied to federal agencies.
Q & A Highlights
Q: Can you discuss the sentiment from your US government and commercial customers and how it reflects in your backlog? A: Bob Pragada, Chair and CEO, stated that customer sentiment remains positive despite the political narrative. The company is seeing double-digit pipeline growth across end markets, and the cadence of awards is reflected in backlog growth, indicating no dramatic shifts in customer behavior.
Q: What initiatives are contributing to margin improvement this year, and what can we expect in the back half? A: Venk Nathamuni, CFO, highlighted ongoing cost controls, operating leverage from revenue growth, and a global delivery model as key contributors to margin improvement. The company expects a slight dip in Q2 margins due to holiday timing but anticipates reaching a 13.8% to 14% margin for the full year.