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The Bottom Line Upfront 💡
Fresh off a mega-merger with Jacobs’ Critical Mission Solutions business, Amentum is now a government services heavyweight with $45 billion in backlog (that’s not a typo!). With 53,000 employees across 80 countries, they’re the company that cleans up nuclear waste, helps NASA reach for the stars, and keeps our nation’s secrets… well, secret. Think of them as the company that does all the complicated stuff the government needs but doesn’t know how to do it themselves!
Layer 1: What’s Under The Hood? 🔧
Amentum is like the Swiss Army knife of government contractors - if the Swiss Army knife was cleared to handle nuclear materials and classified information. They do everything from cleaning up radioactive waste sites to helping design the next generation of space missions.
Core Business Lines:
Environmental Solutions & Energy: They’re basically the world’s fanciest cleanup crew, handling nuclear decommissioning and environmental remediation. They’re also working on cool stuff like small nuclear reactors!
Space Solutions: From launch to landing, they help NASA and others reach for the stars. Yes, rocket science is literally in their job description.
Intelligence & Cyber: The classified stuff they can’t talk about (but it’s probably really cool).
Research & Development: Testing everything from hypersonic missiles to autonomous systems.
Key Internal Metrics They Obsess Over:
Backlog: $45.0B (holy moly!)
Funded backlog: $7.6B (the stuff they’re definitely getting paid for)
Contract mix: 62% cost-plus-fee, 27% fixed-price, 11% time-and-materials
Security clearances: The more, the better
Employee retention: With 53,000 employees, brain drain would be bad
Layer 2: King of the Hill? 👑
Amentum plays in the big leagues of government contracting, competing with everyone from specialized firms like Booz Allen Hamilton and CACI to defense giants like Lockheed Martin. Unlike their competitor KBR, which splits focus between government and commercial work, Amentum is all-in on government, with 90% of revenue coming from Uncle Sam.
Market Position:
#1 or #2 in most of their core markets
One of the largest environmental management contractors to the DOE
A major player in NASA’s mission support
Deep relationships with the Intelligence Community (the kind you can’t talk about at parties)
Layer 3: Show Me The Money! 💰
Revenue Breakdown:
U.S. Revenue: $6.06B (72% of total) ↗️ 5% from 2023
International: $2.33B (28% of total) ↗️ 32% from 2023
Customer Mix:
Department of Defense & Intelligence: 67%
Other U.S. Government: 23%
Commercial & International: 10%
The trend? They’re growing everywhere, but international is growing faster. That $45B backlog means they’ve got more work lined up than most companies see in a decade!
Layer 4: Cash Rules Everything Around Me 🏦
The Numbers:
Gross margin: 9.5% (hey, government work isn’t known for fat margins)
Operating income: $291M ↗️ from $57M in 2023
Cost of revenues: 90.5% of revenue (I told you margins were tight!)
Cost Structure:
Biggest expense: Labor (it turns out rocket scientists and nuclear engineers aren’t cheap)
Debt: $4.7B (that merger wasn’t free, folks)
Cash: $452M (enough to keep the lights on)
Layer 6: Powers Combined! ⚡
Scale Economics: ✅
Try getting security clearances for 53,000 people from scratch. We’ll wait.
Switching Costs: ✅
Once you’re running a nuclear cleanup site, the government isn’t going to switch contractors because someone underbid by 5%.
Cornered Resource: ✅
Those security clearances and past performance credentials are harder to get than tickets to a Taylor Swift concert.
Counter Positioning: ❌
Their business model is pretty standard for the industry.
Branding: ✅
In government contracting circles, they’re a household name.
Network Effects: ❌
Each new contract stands on its own.
Process Power: ✅
They’ve turned complex government contracting into a science.
Layer 7: But You Don’t Have to Take My Word for It 🔮
Bull Case:
Government spending keeps growing (and it usually does)
International expansion continues to accelerate
Merger synergies exceed expectations
They win more large, complex contracts
Bear Case:
Government budget cuts (unlikely but possible)
Integration challenges from the merger
Rising interest rates hurt their debt service
Competition intensifies
What We Have to Believe: The government will continue outsourcing complex technical work, and Amentum’s scale and capabilities make them a go-to provider. The merger needs to deliver promised synergies, and they need to keep winning their fair share of contracts. If you believe the government will keep spending money on defense, space, and environmental cleanup (spoiler alert: they will), Amentum lets you play all these trends with one stock.
Remember, this is the company that helps clean up nuclear waste sites AND supports space missions. Not many companies can put that on their resume!
Disclaimer: This guide is for informational purposes only and does not constitute financial advice, investment recommendations, or an offer or solicitation to buy or sell any securities. The information contained in this report has been obtained from sources believed to be reliable, but StrataFinance does not guarantee its accuracy, completeness, or timeliness.