Amentum Holdings, Inc. (AMTM)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our unaudited condensed consolidated financial condition and results of operations should be read in conjunction with the Amentum Holdings, Inc. unaudited condensed consolidated financial statements, and the notes thereto, and other data contained elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis should also be read in conjunction with our audited consolidated financial statements, and notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended October 3, 2025. In addition, please see “Information Relating to Forward-Looking Statements” and “Item 1A. Risk Factors” within our Annual Report on Form 10-K for a discussion of the risks, uncertainties and assumptions associated with these statements.

References to “Amentum”, the “Company”, “we”, “our” or “us” refer to Amentum Holdings, Inc. and its subsidiaries unless otherwise stated or indicated by context.

18

Overview

We are a global advanced engineering and technology solutions provider to a broad base of U.S. and allied government agencies, and customers in international and commercial markets, supporting programs of critical national importance across energy and environmental, intelligence, space, defense, civilian and commercial end-markets. We offer a broad reach of capabilities including energy, environmental remediation, intelligence and counter threat solutions, data fusion and analytics, engineering and integration, advanced test, training and readiness, and citizen solutions. As a leading provider of differentiated technology solutions, we have built a repertoire of deep customer knowledge, enabling us to engage our customers across multiple capabilities and markets. Underpinned by a strong culture of ethics and safety, Amentum is committed to operational excellence and successful execution.

We conduct our business activities and report financial results as two reportable segments: Digital Solutions (“DS”) and Global Engineering Solutions (“GES”). The DS segment provides advanced digital and data-driven solutions including intelligence analytics, space system development, cybersecurity, and next generation IT across the federal government and commercial clients. The GES segment provides large-scale environmental remediation, nuclear power solutions, platform engineering, sustainment and supply chain management across all seven continents for the U.S. government and allied nations. The presentation of financial results as two reportable segments is consistent with the way the Company operates its business and the manner in which our chief operating decision maker (“CODM”), currently our Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

Budgetary and Regulatory Environment

In fiscal year 2025, we generated approximately 81% of our revenues from contracts with the U.S. federal government, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. federal government. We carefully follow the U.S. federal budget, legislative and contracting trends and activities and evolve our strategies accordingly.

Following a government shutdown from October 2, 2025 to November 12, 2025 and a partial government shutdown from January 31, 2026 to February 3, 2026, final appropriations legislation for the U.S. federal government fiscal year (“GFY”) 2026 was passed on February 3, 2026 for all government agencies except the Department of Homeland Security, which remained shutdown until funding was passed on April 30, 2026. In April 2026, the GFY 2027 budget request was submitted to Congress, which, as compared to GFY 2026 enacted levels, would increase defense discretionary spending by $250 billion to $1.15 trillion, and based on defense reconciliation legislation currently pending in Congress, would result in total GFY 2027 defense spending of $1.5 trillion, an increase of 43% from the GFY 2026 enacted level. While we view the budget environment as constructive and believe core funding sources for our primary customer-based markets will continue to experience bipartisan support, there can be no certainty about the level of funding for any particular GFY or that appropriations bills will be passed in a timely manner. During those periods of time when appropriations bills have not been passed and signed into law, government agencies operate under a continuing resolution (“CR”), a temporary measure allowing the government to continue operations at prior year funding levels. Depending on their scope, duration, and other factors, CRs can negatively impact our business due to delays in new program starts, delays in contract awards decisions, and other factors.

We continue to monitor the actions of the administration, including NASA’s increased focus on insourcing certain activities, which could result in a change to budgetary priorities or impact federal government procurement timing. Although a limited number of our contracts for the U.S. Government have been affected by changes in budgetary priorities by the administration, the impact has not been material to date. Decreases in, or delays in approving, the federal government’s budget, decreases in government spending on the types of programs that we support, delays in government contract awards, and pauses on government contracts on which we are currently performing could have an adverse impact on our business.

For a discussion of risks, see Part II. Item 1A. Risk Factors in this Report and Part I. Item 1A. Risk Factors in our Fiscal Year 2025 Form 10-K.

Market Environment

We believe our scale, breadth of capabilities, and depth of experience give us a robust understanding of our customers’ evolving needs. Given our portfolio diversity, we believe our total addressable market, and associated growth rate, is sufficient to support our strategic growth plans.

We believe Amentum’s capabilities are strategically aligned to well-funded, long-term priorities for the federal government, allied nations, and commercial customers. Specifically, we believe we are well positioned to continue to win new business driven by the following trends in our addressable market:

•Increasing demand for outsourced services and solutions with federal government customers;

•Increased global demand for reliable power sources and nuclear energy;

•Increased spending on government-wide modernization priorities;

19

•Increasing government focus on near-peer competitors and other nation state threats;

•Increasing discretionary spending for homeland security and regional activities in the Western hemisphere;

•Increasing discretionary spending for Indo-Pacific regional activities and initiatives;

•Increasing discretionary spending to improve the readiness of the defense industrial base; and

•Increased investment in advanced technologies (e.g., hypersonics, microelectronics, unmanned, electromagnetic spectrum).

Results of Operations for the Three Months Ended July 3, 2026 and June 27, 2025

The following table presents our results of operations for the periods presented:

Revenues — The decrease in revenues was primarily attributable to the transition of certain contracts from consolidated to unconsolidated joint ventures and fiscal year 2025 divestitures partially offset by the net impact of the expected ramp-down of historical programs and the ramp up of new contract awards and growth on existing programs.

Cost of revenues — The decrease in cost of revenues was primarily attributable to decrease in revenues discussed above. As a percentage of revenues, cost of revenues was 89.7% for both the three months ended July 3, 2026 and June 27, 2025.

Selling, general, and administrative expenses (“SG&A”) — The decrease in SG&A was primarily attributable to synergies arising from the merger of the Jacobs Solutions Inc. (“Jacobs”) Critical Mission Solutions business and portions of the Jacobs Divergent Solutions business (and, together with the Critical Mission Solutions business, referred to as “CMS”). SG&A as a percentage of revenues decreased to 3.5% for the three months ended July 3, 2026 from 4.6% for the three months ended June 27, 2025 primarily due to the reduction in SG&A discussed above.

Amortization of intangibles — Amortization of intangibles primarily relates to the amortization of our backlog and customer relationship intangible assets, which decreased due to the full amortization of backlog associated with the CMS merger in the prior year.

Equity earnings of non-consolidated subsidiaries — Equity earnings of non-consolidated subsidiaries include our proportionate share of the income from equity method investments partially offset by the utilization of fair market value adjustments assigned to certain equity method investments based on the remaining period of performance for the related contract and increased primarily due to the transition of certain contracts from consolidated to unconsolidated joint ventures.

Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our term facility principal balance as compared to the three months ended June 27, 2025 and more favorable rates due to the first amendment to the Credit Facility (the “Amendment”).

Loss on extinguishment of debt — The loss on extinguishment of debt was due to the Amendment and a $125 million voluntary principal payment on the Term Loan B for the three months ended July 3, 2026 and a $191 million voluntary principal payment on the term facility for the three months ended June 27, 2025.

20

Provision for income taxes — The effective tax rate for the three months ended July 3, 2026 was 29.8%, as compared to 108.3% for the three months ended June 27, 2025. The change in the effective tax rate was primarily due to the recognition of a valuation allowance against a disallowed interest expense deferred tax asset relative to income before income taxes in the respective period.

Net income attributable to non-controlling interests — Net income attributable to non-controlling interests includes the utilization of fair market value adjustments assigned to certain non-controlling interests based on the remaining period o

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the other sections of this information statement, including our audited consolidated financial statements, and notes thereto, “Risk Factors,” and “Cautionary Note Regarding Forward-Looking Statements.” This discussion contains forward-looking statements that involve risks and uncertainties, all of which are based on our current expectations and could be materially affected by the uncertainties and other factors described throughout this information statement and particularly in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” You should review those sections for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

References to “Amentum”, the “Company”, “we”, “our” or “us” refer to Amentum Holdings, Inc. and its subsidiaries unless otherwise stated or indicated by context.

Overview

We are a global advanced engineering and technology solutions provider to a broad base of U.S. and allied government agencies, and customers in international and commercial markets, supporting programs of critical national importance across energy and environmental, intelligence, space, defense, civilian and commercial end-markets. We offer a broad reach of capabilities including energy, environmental remediation, intelligence and counter threat solutions, data fusion and analytics, engineering and integration, advanced test, training and readiness, and citizen solutions. As a leading provider of differentiated technology solutions, we have built a repertoire of deep customer knowledge, enabling us to engage our customers across multiple capabilities and markets. Underpinned by a strong culture of ethics and safety, Amentum is committed to operational excellence and successful execution.

We conduct our business activities and report financial results as two reportable segments: Digital Solutions (“DS”) and Global Engineering Solutions (“GES”). The DS segment provides advanced digital and data-driven solutions including intelligence analytics, space system development, cybersecurity, and next generation IT across the federal government and commercial clients. The GES segment provides large-scale environmental remediation, nuclear power solutions, platform engineering, sustainment and supply chain management across all 7 continents for the U.S. government and allied nations. The presentation of financial results as two reportable segments is consistent with the way the Company operates its business and the manner in which our chief operating decision maker (“CODM”), currently our Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

Budgetary and Regulatory Environment

In fiscal year 2025, we generated approximately 81% of our revenues from contracts with the U.S. federal government, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. federal government. We carefully follow the U.S. federal budget, legislative and contracting trends and activities and evolve our strategies accordingly.

In May 2025, the President’s U.S. federal government fiscal year (“GFY”) 2026 budget request was submitted to Congress. As compared to the GFY 2025 budget, the GFY 2026 budget request maintained defense discretionary spending at $892 billion, reduced non-defense discretionary spending by approximately 21% to $557 billion, and increased GFY 2026 defense spending to $1.01 trillion, an increase of 13% from the GFY 2025 enacted level. Final appropriations legislation for GFY 2026 was not passed as of October 1, 2025, the first day of GFY 2026, and the federal government shut down most agencies of the federal government until November 12, 2025, when a continuing resolution was passed to reopen the federal government and provide funding through January 30, 2026. While we view the budget environment as constructive and believe core funding sources for our primary customer-based markets will continue to experience bipartisan tailwinds, there can be no certainty about the level of funding for any particular GFY or that appropriations bills will be passed in a timely manner. During those periods of time when appropriations bills have not been passed and signed into law, government agencies operate under a continuing resolution (“CR”), a temporary measure allowing the government to continue operations at prior year funding levels. Depending on their scope, duration, and other factors, CRs can negatively impact our business due to delays in new program starts, delays in contract awards decisions, and other factors.

Under the Trump administration, the Department of Government Efficiency was created, the One Big, Beautiful Bill Act was passed which made certain tax cuts permanent, reduced healthcare spending and increased spending related to border security, defense, NASA and energy production, and the U.S. Government is in the process of, or has announced its intent to, increase

44

current tariffs, impose additional tariffs, and expand tariffs on goods imported from various countries into the United States. We continue to monitor the actions of the administration which could result in a change to budgetary priorities or impact federal government procurement timing. Although a limited number of our contracts for the U.S. Government have been affected by changes in budgetary priorities by the administration, the impact has not been material to date. Decreases in, or delays in approving, the federal government’s budget, decreases in government spending on the types of programs that we support, delays in government contract awards, and pauses on government contracts on which we are currently performing could have an adverse impact on our business.

Market Environment

We believe our scale, breadth of capabilities, and depth of experience give us a robust understanding of our customers’ evolving needs. Given our portfolio diversity, we believe our total addressable market, and associated growth rate, is sufficient to support our strategic growth plans.

We believe Amentum’s capabilities are strategically aligned to well-funded, long-term priorities for the federal government, allied nations, and commercial customers. Specifically, we believe we are well positioned to continue to win new business driven by the following trends in our addressable market:

•Increasing demand for outsourced services and solutions with federal government customers;

•Increased global demand for clean and environmentally sustainable solutions;

•Increased spending on government-wide modernization priorities;

•Increasing government focus on near-peer competitors and other nation state threats;

•Increasing discretionary spending for Indo-Pacific regional activities and initiatives; and

•Increased investment in advanced technologies (e.g., hypersonics, microelectronics, unmanned, electromagnetic spectrum).

Results of Operations for the Years Ended October 3, 2025, September 27, 2024 and September 29, 2023

The following table presents our results of operations for the periods presented:

Results of Operations October 3, 2025 vs September 27, 2024

Revenues — The increase in revenues was primarily attributable to revenues from the merger with CMS.

Cost of revenues — The increase in cost of revenues was primarily attributable to the increased revenues volume from the merger with CMS. As a percentage of revenues, cost of revenues was 89.5% and 90.5% for the years ended October 3, 2025 and September 27, 2024, respectively.

45

Selling, general, and administrative expenses (“SG&A”) — The increase in SG&A was primarily attributable to the merger with CMS. SG&A as a percentage of revenues increased to 4.3% for the year ended October 3, 2025 from 4.2% for the year ended September 27, 2024 primarily due to the merger with CMS and an increase in acquisition, transaction and integration costs.

Amortization of intangibles — Amortization of intangibles primarily relates to the amortization of our backlog and customer relationship intangible assets, which increased due to the merger with CMS.

Equity earnings of non-consolidated subsidiaries — Equity earnings of non-consolidated subsidiaries include our proportionate share of the income from equity method investments and decreased due to utilization of fair market value adjustments assigned to certain equity method investments obtained in the merger with CMS partially offset by the performance of our non-consolidated subsidiaries.

Interest expense and other, net — The decrease in interest expense and other, net was primarily due to the reduction to our Term Loan principal balance as compared to the year ended September 27, 2024 combined with a decrease in interest rates, partially offset by the interest incurred on our Senior Notes during the fiscal year ended October 3, 2025.

Loss on extinguishment of debt — The loss on extinguishment of debt for the year ended October 3, 2025 was due to $722 million of voluntary principal payments on the Term Loan. The loss on extinguishment of debt for the year ended September 27, 2024 was due to a loss on the debt modification of $14 million and debt issuance costs of $31 million.

Gain on acquisition of controlling interest — The gain on acquisition of controlling inte

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]