KBR

KBR separated from Halliburton in April 2007 and by FY2018 operated three segments: Government Services ($3.5 billion revenue), Technology Solutions ($297 million revenue, ~36% gross margin), and Energy Solutions/Hydrocarbons Services ($1.2 billion revenue). Total revenue was $4.9 billion with adjusted EBITDA of $412 million at an 8.4% margin (10-K FY2018, filed February 26, 2019). The Government Services segment, while the largest by revenue, generated relatively thin margins driven by legacy cost-plus logistics contracts including LOGCAP. The volatile engineering, procurement, and construction (EPC) project revenue from Energy Solutions created earnings unpredictability. KBR trailed government IT peers like Booz Allen Hamilton (~10% EBITDA margin) and Leidos (~8%).

Starting in 2018 under CEO Stuart Bradie, KBR executed a fundamental portfolio transformation over five years:

• Government Solutions acquisitions: Acquired Stinger Ghaffarian Technologies (SGT) in April 2018 for approximately $355 million, adding NASA and defense technical services contracts with $3.4 billion in backlog. Followed with Centauri in October 2020 for approximately $827 million, adding intelligence community, military space, and directed energy capabilities (10-K FY2023).
• Portfolio simplification: Divested non-core assets including the Infrastructure Americas and Building Group businesses, and reorganized the volatile hydrocarbons-related operations. By FY2023, KBR reported two clean segments: Government Solutions and Sustainable Technology Solutions (STS).
• Sustainable Technology Solutions pivot: Retained and repositioned the proprietary process technology licensing business (ammonia, clean energy, refining technology) as the STS segment. This IP-licensing model generates licensing fees at operating margins above 20%, transforming what was a cyclical engineering business into a high-margin technology portfolio.
• LOGCAP V win: Won one of three LOGCAP V task orders in 2019 with improved contract terms, securing a multi-year revenue floor.
• International expansion: Grew government services work in the UK, Australia, and Middle East, diversifying beyond U.S. federal dependence.