Well, good morning, and welcome to Amentum's Capital Markets Day. I'm excited to see everyone here at the New York Stock Exchange, and I'd like to extend a warm welcome to those of you who dialed in virtually. Before we get started, I wanna highlight the safe harbor statement and additional disclosures on slides two and three of the presentation. Our remarks today will include forward-looking statements that represent our beliefs and expectations regarding future events, and are subject to risks and uncertainties that could cause actual results to differ materially. Some of those factors may cause differences that can be found in our Form 10, filed with the SEC on August 5th. We will discuss non-GAAP financial measures. The most directly comparable GAAP measures, along with a reconciliation to those measures, can be found in the appendix to the accompanying slides.
Today's presentation will be about 3.5 hours, including a 30-minute break for lunch. During today's presentation, you will hear from several members of our leadership team, including Steve Demetriou, Jacobs' Executive Chair, who will serve as Amentum's Executive Chair after close. He'll introduce our combined company. John Heller, our CEO, will walk us through our strategy and key investment highlights. Steve Arnette, EVP and President of Jacobs Critical Mission Solutions, who will be the Chief Operating Officer of Amentum after closing, as well as Jill Bruning, President of Amentum's Engineering, Science, and Technology business, who will be Chief Technology Officer of Amentum after closing. Together, they'll break down our business into five markets, excuse me, the five markets we serve.
After lunch, a break for lunch, Jill will provide additional details on our core engineering and technology solutions and the competitive advantage they provide Amentum. Lastly, Travis Johnson, our Chief Financial Officer of Amentum, will walk through the financial overview and outlook for the combined business. Following prepared remarks, we have reserved approximately 30-45 minutes for Q&A. For those joining via webcast, please remember to submit your questions through the Q&A function. With that, it's my pleasure to hand the presentation over to Steve Demetriou.
Nice job. All right. Thank you, Nathan, and thanks, everyone, for joining us today, both in person and virtually. Before we move to the presentation, I'd like to make a few comments on my background and how we got here. Over the last three decades, I've been involved in several successful merger initiatives, and specifically, the last nine years, reshaping and transforming Jacobs, where we created significant value and for our employees and our shareholders. First seven years as CEO, the last two years as Executive Chair. As I reflect on my career, I could not be more excited about this merger that we're gonna discuss with you today. It has all the hallmarks of success in terms of culture, capabilities, and profitable growth.
Once we at Jacobs made the strategic decision last year to separate the CMS and cyber and intelligence business units from the Jacobs portfolio, we were faced with several attractive options: a standalone spinoff, several folks approached us about buying the assets and also various merger initiatives. The combination with Amentum was by far the most strategic and attractive, and I'm speaking for all stakeholders. For example, John Heller will shortly discuss how clients will significantly benefit from combined complementary capabilities, providing them differentiated mission advantage solutions. Employees will benefit from the shared vision, the aligned values, the inspirational new culture, all leading to enhanced career opportunities at Amentum. And as a result of strong cost and revenue synergies, which will lead to higher growth rates and higher margins, our shareholders will realize enhanced returns.
For me, personally, I'm proud of being one of the key architects of this merger, but as we approach the completion of this deal and begin to stand up the new Amentum, I'm extremely excited about moving over to become Executive Chair of Amentum and, and be part of this massive opportunity. Moving to slide six, I'm proud to introduce the new Amentum, an engineering and technology leader, transforming the aerospace and defense industry. The combination of Amentum and Jacobs Critical Mission Solutions and Cyber and Intelligence business units will create a business with unparalleled scale, uniquely positioned to help customers address their most complex challenges by delivering mission advantage solutions through advanced engineering and technology. The new Amentum will better serve customers across the world's highest priority areas, including environmental sustainability, space exploration, and national security.
Very importantly, for this merger, there'll be minimal overlap in capabilities and expertise, enabling us to expand our customer base and grow Amentum's addressable market. And we'll become one of the largest government service contractors with a global workforce of over 53,000 across approximately 80 countries. And we'll be establishing our position as a truly global business in creating new opportunities to upskill our team, a great opportunity for all employees at new Amentum. Following the combination, Amentum will generate revenues of approximately $14 billion, and importantly, the business will have a combined backlog of more than $47 billion, the largest in our industry, representing approximately 3.8 times revenue coverage, providing excellent visibility into profitable growth. Now turning to slide seven.
With this combination, Amentum is redefining the industry, creating a leading engineering and technology partner for the U.S. government and its allies. We have a great starting point with a proven track record of superior performance, with well-positioned to drive long-term, sustainable growth. There are several strategic benefits that are gonna drive this success at Amentum, and they're outlined on this slide. Starting with enhanced offering of solutions for customers in the U.S. and around the world, leveraging relationships with U.K., Europe, and across the Indo-Pacific region. The new Amentum will have the most diverse offering in our industry, not just based on capabilities, but across contracts and customers. And we'll do this with next generation technology, where we're uniquely positioned to integrate advanced, cutting-edge technology solutions for our customers.
The new Amentum will be one of the largest pure-play government services providers in the sector, and this scale will enable us to differentiate ourselves as a formidable industry force for today's global complex environment. This will lead to a strong financial opportunity, where we're well-positioned for revenue growth and margin expansion, with a robust backlog, a healthy balance sheet, and strong cost and revenue synergy expectations. As Travis will talk later on, we expect strong free cash flow, and we'll be relentlessly focused in achieving our previously announced net leverage target of 3x within 24 months. The key to all this will be our people and our culture. We'll have an extremely deep talent base with the expertise and experience to provide customers the breadth of solutions they require, unlike no one in this industry.
With skilled engineers across all disciplines, including nuclear, aerospace, cyber, software, environmental, and much more, this company will be tremendously positioned. John will discuss shortly, the new Amentum, how they have the ability to attract and recruit the next generation talent in the critical technology space. On slide eight, starting at the bottom of this slide, we have put together an incredible board to govern the new Amentum. The board brings significant public company experience with a strong track record in the government sector, bringing financial expertise, organizational leadership, strong strategic skills, capital market experience, diversity, and much more. Today, you'll hear from several of our highly experienced management team, who will lead the new Amentum. Each have an impressive track record in our industry.
Most importantly, this senior leadership team understands the importance of getting the culture right to successfully merge these businesses and deliver on our promises. During this 10-month period between signing and closing, I've been impressed on how they have brought together more than 100 leaders from both sides, forming an integration office and spending meaningful time on discussing the importance of fully engaging all of our people, showing a strong commitment to achieve an aligned, a high-performing, and dynamic culture for Amentum going forward. As we stand up this new company, we're fortunate to have John Heller as the Chief Executive Officer leading the way. Over the last year, I've worked closely with John in putting this deal together and steering the Integration Management Office. I'm so excited about his vision for the new Amentum.
John has distinguished himself as a great CEO in our industry, driving strong organic growth, along with excellent success in bringing companies together and unleashing the combined benefits. John is a highly engaged with clients, investors, and most of all, an inspiring people leader. So with that, let me turn the presentation over to John Heller.
Hi. Wow, that was a pretty good intro. I, I got a lot to live up to. Thank you, Steve, and good morning, everyone, and welcome to the Amentum event. Pretty exciting to be here. I guess you'd say this is a big day for all of us. We've been working a lot to get to this day. I'm the CEO of Amentum, as Steve mentioned, and, for those of you who've known me, may have known me for a while, I've been in government services for quite a long time. During that time, I've been able to be part of or witness some major events in our industry, and many of these events have shaped the course of the government services sector.
Bringing Amentum and Jacobs together is one of the biggest events that we have seen over the past 25 years. It's pretty significant. Steve gave, I thought, a great, powerful explanation of why we're bringing these two companies together. Who better to give that explanation than the guy that led that decision and who's going to be our chairman? Which is pretty great... My objective this morning is to actually give you kind of more of the what is Momentum, what is Amentum, and how are we going to execute our strategy to create value? So let me start with introducing the who is Amentum. So when - Oop! Got the right button.
So you look at this and you'd see our vision, mission, values, and say: "Well, geez, they haven't even closed the deal, and they have their vision, mission, values." The significance that Steve alluded to is we've had 10 months since signing to work together. We have had groups of employees spending time in the same room from Amentum and Jacobs, collaborating, talking about how we wanna operate this business going forward. In addition, we interviewed and sent out surveys to tens of thousands of employees to get their feeling about what they want to see in the new Amentum, what they want us to see the values to be. And what we found, not surprisingly, 'cause we talked a lot about this when we were putting this deal together, is that the values of the two businesses were pretty close.
But what's important is that we worked with our employees to put this together ahead of time, and we've been spending 10 months to work on integration, so that when we close the deal later in September, we are gonna operate as one company, one Amentum. We are gonna be combined as a single business. We have defined the organization, the leadership, and the values, and the mission that our employees will be excited about, and getting them bought in to what we're doing so that we're ready to run on day one and ready to execute our strategy.
Now, what I also wanna do here is to make sure that you understand our core markets, 'cause we're gonna spend a lot of time, both myself and Steve Arnette and Jill Bruning after me, introducing you to Amentum's core markets and what we're doing in these core markets and how exciting it is. And if there's one thing that I'd want you to take away from this slide relative to that, is our mission. Because our mission really defines the who is Amentum. This idea that for us, when you look at this mission, advancing engineering and technology solutions to the most significant challenges in science, security and sustainability, and you will see this message throughout the presentation, and I hope that creates the image of who we are.
You will see that Amentum is performing some of the most amazing activities in engineering and science, far beyond probably than what you even anticipated. And that gives us unbelievable capability and credibility in the marketplace to grow beyond where we're doing work today, and to move in and expand by taking the collection of these two businesses, the capabilities, the past performance, and grow. And we're gonna grow into these five markets that I have the images here, and I'll just go through them real quickly because Steve and Jill are gonna give you the deep dive. But each of these are defined by a problem set that we put solutions together to solve. The first is environment. The problem set there is environmental remediation and energy transition.
An example of a project there is, the remediation work we do at the Hanford Site up in Washington State, doing nuclear waste remediation. The space market, the problem set there, space exploration and superiority. An example of what we do there is doing classified communication for space command and control for systems at NORAD. For defense, the problem set there is combating multi-domain, near-peer adversaries. And for us, and just one example, is work we do for NAVSEA, Naval Sea Systems Command. International Fleet Solutions Project, delivering naval engineering solutions to our allied navies. Civilian, the problem set there, civilian, citizen, stability, and advancement challenges. An example of what we're doing in that space is for Department of Homeland Security, counter-UAV development and prototyping.
So you can see by this expansive set of markets that we are doing some amazing things, and you thought your job was exciting. So we see this fantastic start that we have and how well-positioned we are. But let's talk about some of the key strengths of our business and what we are going to use to create growth going forward. The first area is the fact that this company coming together has an amazing history and amazing trust level with our customer, and that trust level gives us superior capability to interact with our customers, to gain access to their business. Oop! All right. Sorry. I guess I would skip the slide. Okay, I know this. Looking at this thing, the slide's so far over, I can't even see it.
Okay, let me take a step back, and let's talk about our position for growth and margin expansion. I talked about who we were and what markets that we focus on. We have a great basis for growth based on two important things. One is our industry, the strength of our industry, and two is Amentum differentiation. When you think about our industry, it starts with the geopolitical climate. It's hard to wake up any morning without feeling stressed about what's happening in the world. We have these near peer adversaries that are investing tremendous amount of money that is creating the need for the United States and our allies to invest to keep up with the technology advances of our adversaries, and that is driving our industry forward. You also have the growing importance of our allies and the cooperation that we have with our allies.
The United States can't do this alone. It requires cooperation. It requires companies to support the US that have reach around the globe, that can work together with our allies to bring solutions to keep the world safe and secure. It's also the prioritized focus on modernization and next generation technologies. This idea that technology is moving faster than ever, and the government requires companies that are able to provide that support to keep the United States up with our adversaries on the next generation of technology. And finally, just the strength of the budget of the US government and our allies. If you look over the past 20 years, the underpinning of the budget has been strong, steady, predictable growth, and we expect that to continue based on these other factors. So how is Amentum going to take advantage of that strong industry?
You look down here, A, it starts with trust, and I'll get into more detail, but being a trusted partner so that our customers will look to us to do the most complex and important projects for them. Two, is having differentiated scale, the ability to do multiple things, end-to-end capability to deliver for our customers. Advanced engineering and technology, one of the core centerpieces of our business, that everything that we are doing for our customers requires integration with advanced technology and advanced engineering to move our customers into the future. The fourth, highly skilled and diverse workforce, global workforce, having the people with the skill around the world to support our customers' needs. And finally, diversification, the strength of diversification that's really meaningful in terms of reducing risk and opening up addressable market. Making sure I'm on the right slide here.
So I talked about that idea of trusted partner, and I was giving you the intro to this slide a second ago. Our two companies have been operating for over 100 years, performing some of the most complex and important missions for our customer, delivering some of the most advanced capabilities for our customers. And that level of trust positions us to go and move generationally, to move from a generation of work and a generation of technology into the next generation, and then into the future. And if you look at the history of our company, there are example after example of us taking capability and work with the customer and transitioning that relationship to the next generation.
I've only put three examples on the slide, but just to give you a taste of what I'm talking about, at NASA, this company had a history of working with NASA on the Apollo program, helping to put the first people on the moon. We transitioned that relationship and trusted partnership because of outstanding delivery excellence and building that relationship, we were able to then have a lead role on the Artemis rocket program as the lead design engineer. Artemis is the largest rocket that the U.S. has ever developed, and as we think to the future and where NASA may go next with the mission in Mars or somewhere else, we are well-positioned, given our partnership with them in the past and today, to be working with them in the future.
The second, during the Cold War, supporting the Oak Ridge Lab, ensuring that the government could operate and perform their mission there. Fast-forward to today, our relationship with the Department of Energy has put us in a prime position to be the leader in environmentally remediation work at Oak Ridge, Savannah River, and many other locations. The excellent work we are doing in those places puts us in prime position to support Department of Energy as they look to the future to developing alternative energy sources, to move the United States and our allies away from fossil fuels.
And finally, the SR-71 Blackbird and our role in research, development, test, and evaluation on that program, and the work that we did to put that aircraft up in the sky, and it did so well and positioned ourselves with trust to then move forward to be a leader in UAV engineering, and now, today, counter-unmanned system development and engineering. And if we think about the future and what's ahead, all different types of next generation platforms that'll come next, and our history with the Air Force well positions us for further growth and expansion. As I talk about our trust level, but I also think our differentiated scale, bringing these two companies together, very impressive businesses by themselves, doing unbelievable work in engineering and technology, but combining them has so many advantages that we can take advantage of.
And if you look to the right side of this, starts with, obviously, the depth and domain expertise and that customer access. We do work together with every major government agency, and it's not just that we have a relationship, we have historical deliveries that we have done on projects and currently delivering projects for these agencies. What does that give us? Substantial addressable market and opportunity for further growth, bringing the combined capabilities of the two companies together. Second, the economies of scale that everyone probably expects that would come from this, and Travis will talk more about this later, but our ability to bid and win and be more competitive, both from potentially increasing our win rates, but also increasing our margins. Don't always pass all of that cost benefit back to the customer.
The third, the idea that we have this backlog, Steve mentioned this, that $47 billion of backlog. Why is that meaningful? As a CEO or as a management team, we have the ability to take a breath. We have that lower risk in our portfolio so that we can focus on meaningful strategy and make investments for growth and target areas that we think have great opportunity in the future. We also have a really interesting dynamic here, bringing these two companies together, where we each have IDIQ vehicles. Combined, we have IDIQ contracts that have a $450 billion contract ceiling. Now, individually, we can't bid all of that because we don't have the past performance, we don't have the capability, and we don't have the customer relationships.
But combining our two companies opens up the opportunity to expand the addressable market inside these IDIQs, to immediately look for growth opportunities in IDIQs, where the opportunity to bid and win is shorter than the normal contract cycle. And then finally, our ability to attract and retain employees. Steve touched on this as well, this idea that we are creating what hopefully is the most meaningful story in the industry, bringing together the most strongest and advanced engineering and technology team in the industry. And I think that will be very attractive for us to attract the best talent, not just technology talent, but also leadership and growth talent, and bring them into Amentum with something very exciting to be a part of.
Then in Amentum, to build a culture that people want to be a part of, to get the opportunity to come to Amentum and have a career and work on different projects that wherever they feel interested in going, that we're creating an enterprise that can attract and retain the best talent in the industry. Having that talent, having that history, and having capability is, does not equal success. You've got to have the proper discipline, methodology, and you focus on outstanding execution and performance excellence, and that's what drives success. If you deliver for your customer, and you take all that value that I've talked about, and you're able to deliver with excellence, then that will help you the best to grow your company.
For us, we have already spent tremendous amount of time working together, preparing for day one, talking about our joint methodology of how we're gonna go to market. You know, you'll hear from Steve Arnett, but he and I, we're already joined at the hip, talking about how we're gonna make this the most powerful company in the industry. And we both agree, and I think I can speak for all of our employees, we have an unbelievable commitment to the mission of our customers and the performance of excellence with our customers. So how are we gonna do that? How are we gonna create an advantage through our go-to-market strategy?
Well, first, it starts with taking this advanced engineering capability that we have collectively and making it available across our enterprise, so we can make sure that everyone in the company has access to the outstanding capabilities that we're pulling together. And we're gonna do that. We have Chief Technology Officer Jill Bruning, you're gonna hear from, and we're gonna do that by creating a horizontal capability in our business. So we're bringing these companies together. The key thing for us is to make sure we have access to that. The second thing is we're gonna layer on key technology capabilities to bring the engineering and technology together so that we can develop the best solutions for our customer through the bidding process and then through the delivery.
To be able to bid with the best solution is key, and our methodology and approach will assure that by ensuring that we have that engineering capability available, and that we have the technology solutions available for our teams to use. And then bringing that together is this absolute commitment to performance excellence. So we bring all three of those together, and I think we have the focus on day one to work together as a team and develop the best solutions and deliver on based on performance excellence. So we have the things I mentioned, a capability that I think can be differentiated in the industry, but it's not just a story about the U.S. government or about the U.S. market. Amentum is a global business. We think globally. Yes, the U.S. is our biggest customer by far, but we have significant base of business around the world.
In the UK, we have over 5,000 employees, and that's our key business partner in terms of what the United States is doing internationally. In Australia, we have over 1,000 employees, and in many other allied countries, we are supporting different governments. You think of what's happening in the world with our near-peer adversaries, we can't do this alone, and as an example is AUKUS, the, many of you have been aware of this, which is a partnership between the United States, the UK government, and Australia's government to partner in national security. Included in that, of course, is the production and sale of submarine capability to Australia, but it's much more than that.
And we have tremendous relationships, both with doing work in those countries, but also people that live and work and are from those countries that are part of Amentum, that have the relationships at the highest parts of government for us to be a part of an initiative like that, and many other things that Steve will go into some detail on. So we really think this will provide a competitive advantage with-- and of course, expands our addressable market. So not only are we looking at the budget of the United States government, but here, the idea is we have the whole world in terms of what we're looking at as an attractive opportunity. So we-- I've given you some good rundown of who Amentum is and the strengths and how we're gonna take advantage of those strengths.
I really like this slide, though, because I think it identifies one of the most meaningful undermining things that bring Amentum strength to light, and it's our diversity. Our diversity across three areas. On the left side, you see our end market diversity, where there is no one end market that makes up even a large part of what Amentum does. And this is part of the advantage of bringing these two companies together, that we have this substantial end market diversity, opening up addressable market, and we're leaders in many of these markets, and creates opportunity in others. But we have strength in each market that we can grow in. We have customer access, as I've mentioned, across every major customer, but at a trusted, significant level.
Of course, think about coming together and now being a $14 billion company, that's pretty meaningful to our customers, and they're gonna pay attention, and we will get that access to them in a meaningful way, so that we're able to position ourselves for the biggest and most meaningful projects for our customer. Then finally, but not last, is contract diversity. The idea that bringing these two companies together gives us a great position of not having any single contract or group of contracts that really create a worry or a risk in the future of the business. Matter of fact, our largest contract, which represents 4% of revenue, 3% of EBITDA, won't even be recompeted for more than five years.
If you look at the contracts that make up 10, the 10% concentration, they are even divided, diversified across four of the end markets you see on the left of the slide. This combination gives us unbelievable diversity, unbelievable opportunity for growth. I've kind of given you this whole bag of things around our capability. I wanna take you just inside our business strategy now, bringing this all together. How are we gonna take all these strengths and make this into more value? Really, the idea and our kind of vision and responsibility of taking, making this more than one plus one equals two. I think it starts first to understand who we are today. Today, we're a company that is focused on large, long-term enterprise, advanced engineering and technology projects. We are primarily, two-thirds of our business, cost- plus contracts.
Cost-plus low-risk, long-term contracts, very important contracts at the leading edge of engineering and technology. So we have that relationship with the customer at the very start of what they're doing. It enables us to be positioned. We have great diversity, we have the skilled workforce, and we have a backlog that is substantial. It gives us a great starting point. And given the fact that we have a large concentration of cost-plus, a large concentration of large enterprise contracts, long contracts, we have a very low CapEx, capital-light business, which gives us a great place to kick off and to focus on growth. How we're gonna do that? Straightforward.
We have our business model, which look, takes a global reach and combines it with deep domain engineering expertise and best-in-class technology to create the most advanced solutions for our customer and win at a high rate. You take that, and then you deliver that on, with performance excellence, and then you focus that energy and that capability to four target growth areas that we've identified around energy transition, security superiority, cybersecurity, and digital modernization. And we think there are growth accelerators that will help us move the business beyond where we've been growing. The idea of focusing on large enterprise contracts, taking advantage of our cost synergies, expanding our cross-selling right out of the gate, and looking at the opportunities of taking the capabilities of both companies to our other, to our existing customers and our existing IDIQs, and optimizing our business and portfolio mix.
You know, look, really, the idea that not all, all parts of the portfolio are equal, and that we will prioritize investment in key areas of our business that have the ability to drive value. And how do we do that? Is we leverage that cross-selling, and we accelerate growth in large addressable markets that have the ability to expand margins. And we do that by using that engineering and technology capability to add technology to differentiate our solutions to the customer. But we always keep absolute discipline on free cash flow. Our commitment to do that is part of our strategy, and then, of course, disciplined capital deployment as well. So I hope you've seen through my area that we are very focused on leveraging that advanced engineering and technology capability that we have and making that a differentiator.
Bringing these two combined companies together gives us the most powerful advanced engineering and technology capability in the industry. And who better to give you more detail on how we're leveraging that today, give you more insight to what we're doing, than Steve Arnett, who will be the COO of Amentum? I've worked side by side with Steve for the past 10 months, and I've actually got to meet him even further than that in this whole process, and, yeah, we get along real well. We're both kinda engineers at heart. He's like, he's part of the history of Jacobs. I think they probably have a statue of him. He's been around there. But, this is someone that I can tell you, can talk technically about any subject that you ask him.
So I can't wait for the questions, 'cause this guy knows everything about what we are doing, and he can talk to you about it with unbelievable detail and expertise. So I am very impressed with his knowledge of, of the business, but also his knowledge of the actual technology and what we're doing for our customer. And Steve, why don't you take over and show them the business?
All right. Thanks for that, John. No pressure there. I, I certainly didn't not get the chance to preview that introduction, but, let me just tell you, really pleased to be here. Thanks to all of you for joining. I'm Steve Arnett. I've actually, just a week ago, celebrated my 29-year anniversary from having joined Jacobs, and it's been a great ride. Really proud to have been a part of that team, that great company, all the things we've accomplished. And I would have told you, prior to any of this coming into existence, that I was gonna make it to 30 and well beyond. It was gonna have to take something really special for me to ever think about not being part of the Jacobs team and... But I'm here to tell you, this is that thing. This is that special thing.
Just over the last 10 months, just like John has mentioned, working carefully with him, with Jill Bruning, who we'll have up to cover the markets with Travis, and getting to meet a lot of the people, even around the workforce population, what we're putting together here is cause for excitement, not just for me, not just for our customers, but for the people that really drive our business. So we're really excited about that. Jill and I are gonna walk you through the five markets that we address. We think there's a whole lot to be excited about there, and these past months, working with Jill to just begin to comprehend all of the capability and technology and solutions that reside in the two incoming businesses, we've had the chance to work very closely on that and even get to many of those locations....
That's just been a thrill. The partnership with John and Travis, but Jill's great partnership in that regard has just been, gives me a lot of cause for optimism on where we're headed. So let us dig into the markets a little bit and give you a little bit more insight into where we're headed. For each market, we wanna give you a snapshot of how we're leveraging our capabilities, and of course, a brighter future when we think about the more comprehensive solution set that we're now putting together as part of Amentum. But more than that, we wanna discuss the strategy that we have for continued growth. But I do think it starts with the market diversity, and John talked about that. There's a lot there in terms of these markets, each of which we today occupy a leading position in the market.
But these markets provide us a strong runway for growth. And we'll highlight how each of these is underpinned by some pretty strong, attractive dynamics within each of the individual markets, and really translating to an opportunity for long-term growth. Before we get into talking about market dynamics and differentiated capabilities, one of the key things, and I really appreciated how John hit on it in his opening remarks, is there is a shared commitment to delivery excellence within this global team that is today's Amentum. All of the customers recognize that we're trusted to deliver their most critical programs. They bring us into the very ... I like to talk about just the pointy tip of the spear in their most critical missions, and trust us to deliver that work.
We're really excited about. We start on day one with an advantaged position in terms of earned trust and reputation with our clients, for not only meeting basic requirements, but driving continuous improvement into the work. So as we go through the markets, there's a recurring theme that I would ask you to listen for, and I think that you'll hear, and that's one of being able to leverage this advantageous relationship of trust that we have with our clients. Being able to leverage this now more comprehensive solution set of capabilities that we together have as the new Amentum, build on our leading presence in each of these high-tech markets to really drive accelerated growth and increase margins over time. We really believe this merger gives us the platform from which to do that.
So let's go ahead and dive into the first market, and I'm gonna start with environment. I go back to the mission statement that John shared. Addressing the most critical challenges in sustainability and science and security. Environment absolutely aligns, those critical challenges in sustainability and science. We are providing advanced engineering and technology solutions really in four key areas: environmental remediation, energy consulting engineering, laboratory and research operations, and clean energy solutions. This environment market has an attractive profile. It's a, it's a large market. You see the greater than $80 billion TAM. It has real staying power. A lot of the critical programs that we support, John mentioned Hanford, there are others as well that we'll spotlight. These are not a few several year kinds of projects, but rather many decades kinds of programs.
And then on the energy side, as we begin, really for the first time, to in a big way, invest in the needed energy transition, there is a massive coming wave of opportunity for us to drive solutions with respect to clean energy transition. And across both the energy and the environment parts of this market, we occupy positions of trust with truly the clients that are shaping the future of our world. A great partnership with the United States Department of Energy, but also in the United Kingdom, supporting both their Nuclear Decommissioning Authority as well as their Atomic Energy Authority. These are three leading clients with whom our relationship spans not a few years, but more than half of a century. So we occupy a unique position of trust in helping them to do their work today, but also to shape the future of their mission.
We wanna highlight specific Amentum differentiation, and then we're gonna dive into a couple of case studies. So that's gonna be a flow that we follow through each of the five markets. So building on the previous slide, four key capability areas. Start with environmental remediation, where we are trusted to manage and execute some of the most complex environmental remediation projects the world over. Across the Department of Energy Complex, you've heard of sites like the Hanford Central Plateau, Oak Ridge in Tennessee. There is a network of these legacy nuclear sites where we are a leading provider of solutions. It's complex work, it's high hazard, and our teams do it safely and well. We're well trusted to do that.
That's the U.S., but also within the United Kingdom, where it's a similar situation, and we're cleaning up sites such as the Sellafield site and several other legacy sites in the U.K. Part of how we succeed in this area is innovating, developing, and deploying advanced technology that allows us to do the work more efficiently and importantly, to do it, keeping the human out of the high hazard condition, and our teams have pioneered a lot of those solutions. Secondly, I'll talk about lab and research operations. So if you think about the Department of Energy in places like, Savannah River, also in the U.K., in places like Sellafield, we're involved in some of the most critical national laboratory activities, really helping our clients to manage the energy life cycle through cutting-edge research and development.
In addition to customer sites, we actually have our own research and development laboratory in the UK, in Warrington, where we're doing an amazing amount of pioneering work in our own laboratory, supporting global clients. And it's everything from what are the solutions you need to safely extend the life of existing gigawatt power stations? What are the key technology breakthroughs that need to happen to truly realize the potential of fusion energy? Or even working exciting concepts around, how do you bring to life and enable this hydrogen economy that so many people are interested in? Energy consulting. We do a lot in the way of strategic advisory, both on the high-tech engineering side of things, but also helping customers with the complex nuclear regulatory framework that you must navigate to bring new solutions in the nuclear energy space to life. Finally, clean energy solutions.
We'll show you with a case study even, how we're involved today in several of the major programs that represent the acceleration of the clean energy transition. We're very much trusted, or our clients trust us to make sure that those capacity installation projects go well. But beyond just executing the project, making sure that the solutions are sustainable, and also trusting us on the front end, research and development of the cycle, to develop the solutions that are gonna be needed for the future projects and the future technologies. As the global demand for clean energy transition continues to grow, and as the priority placed on better environmental stewardship of our globe, these are trends which will allow us to continue to grow with our key customers. Two quick case studies, just to give good illustrative examples of the solutions that we're delivering.
First, we'll talk about Oak Ridge. So Oak Ridge is, if you go back in time, it was a key site during the, say, 1940s, when advances in scientific research really ushered in the nuclear age. Oak Ridge, the Secret City, as it's known, was actually the site of the world's first uranium gaseous diffusion plant. So a lot of rapid scientific progress, but it's one of those legacy sites where there is a significant level of nuclear contamination that now must be dealt with based on the past. So we, Amentum, in 2012, competed and won to win the project, and at that time, that 10-year contract gave us a specific scope for a part of the Oak Ridge Reservation to remediate those sites.
Broad scope, remedial actions, facilities, decommissioning and cleanup, end-to-end management of a new on-site waste disposal facility, which required a lot of advanced technology, as well as the realization of a new water treatment facility. So a lot of activity within that first contract. We did experience a lot of challenge as we executed. The way we met the challenge really was to lean into deploying forward technology. For example, as we encountered different facilities that were of unknown condition at the start of the program, we realized that, number one, were they not only dilapidated from a structural condition, but secondly, there were very high levels of contamination in some of these structures. So we were able to mobilize and utilize unmanned aerial vehicles, advanced sensors, and deploy those technologies into those situations so that we kept humans out of the hazard condition.
It allowed us to really optimize the detailed planning of how we would execute the decommissioning and disposal to great effect. We also pioneered an innovative dispose-as-you-go approach that allowed us, depending on the contamination level of different waste, to really expedite the safe disposal and storage of those activities. Now, the result, through those 10 years, having really delivered those great outcomes, was that we were successful in winning the recompete. And so in 2023, we won another 10-year contract. We're very much in the middle of that right now, and it has a large scope that, again, now opens up the program to a larger swath of the Oak Ridge Reservation. We continue to do the work to a very high degree of safety. So our team has done a great job of focusing on quality and safety.
The Department of Energy has bestowed upon us some of their highest VPP, Voluntary Protection Program, Site of Excellence awards, which we're very proud to receive. We have likewise received several industry commendations about the safety and quality with which we've executed that work. Another key outcome that needs to be mentioned, part of it is cleaning up this site, but really to close the loop and deliver the high-impact solution, it's about returning this land, this site, back to productive use, returning it to the local community, inserting it back into the local economy. One of the things we're really excited about is, and we've just, in the past, one or two years, have opened up what's referred to as the East Tennessee Technology Park, ETTP. That was a highly contaminated site. Now it's an incubator for high-tech local businesses.
That our success with that activity was awarded the EPA high honor of their highest site reuse award. Really a great outcome for that project. So if you look ahead and you think about all of the similar projects that are out there in terms of environmental remediation, our ability to pioneer and deploy advanced technology solutions, deliver the outcomes, gives us great experience, past performance, and know-how to be able to go capture more of this market. Also, just wanna cover a quick case study around nuclear energy transition. If you go to the United Kingdom today, today, and you talk to them about energy, you'll probably encounter somebody that talks about the energy trilemma.
The trilemma starts with supply challenges, 'cause when all the conflict in Ukraine broke out, suddenly the spigot just got turned off in terms of all the fossil fuels coming from Russia. So there's a real challenge around just having supply of a sufficient energy source to power the grid and support the nation's economy and people. That's one piece of it, just variability of supply. The second is affordability. As the supply became scarce, there was dramatic inflation inherent in the society. And then thirdly, you're dealing with this supply challenge, but we also know there's this need to move away from fossil fuels and get into the future solutions of clean energy. So really, a dramatic trilemma. So we have been proud to leverage our relationships and technology know-how to work with the UK to address these issues. We're doing several things.
Right now, today, we're doing these things. Number one, we are helping to manage and execute a new build program. There's a site, Hinkley Point C, where we're about 60% into construction, where we are delivering a new traditional gigawatt nuclear power plant. We've also won a major role in the next nuclear power plant site that will be developed. That's a project called Sizewell C. So we've staffed the project management office, but we're gonna really ramp over the next year to bring that project online. Also, back to our internal research and development capability. We are doing work in our labs to help the UK government safely extend the life of nuclear power stations that, by schedule, should be coming to the end of their life, so we can keep those assets on the grid during this time of supply challenge.
So that's the traditional gigawatt piece, new build and life extension. Let's talk about the future. Today, we are working with no fewer than eight developers of small modular reactors. This has a tremendous potential to address some of the clean energy and supply ramp that's going to be needed in the U.K. and mainland Europe. We're working with them not only to... on the technical side, and our experience in working with different power-producing nuclear reactors is key, but also helping our customers, organizations like Rolls-Royce, like GE Hitachi, like some of the other market-leading companies that are making major investment in SMRs. We're helping them navigate this complex nuclear regulatory framework, 'cause that is, that's certainly an expertise that we have. We're also helping them to think about how would you deploy, and how we're master planning what one of those sites would look like.
We're excited about the fact that every one of those local power installations could be, in truth, a major project for our team. So we're really excited about how that unfolds. Finally, I just wanna mention fusion, which really is a key part of the future energy transition. You may be familiar with ITER. It's a fusion demonstrator and project, the most complex fusion demonstrator that's ever been undertaken. More than 30 international, 30 nations have invested in that project. We're proud to be there, Amentum, as the project engineer and integrator, working with all the international partners to integrate the hardware, the software. We're now building the facility. We're really excited about where that project is headed. And the knowledge we'll gain about future fusion generation is just gonna be tremendous. So very excited about where that project is headed.
So as you can hopefully tell from my remarks, we are thrilled, we are absolutely thrilled with the current portfolio and where we stand, and our excitement is exceeded only about, by our optimism for the future. There's a lot to come in this market that we're excited about. So if you look forward, it's fair to say that this market has some key tailwinds. If you just think about the U.S., the Department of Energy has talked about more than $500 billion environmental liability that will need to be worked in the coming decades. That's great opportunity for us. It's a stable opportunity for us. Beyond the U.S., I've mentioned our work in the U.K., but there's a large and growing backlog of global, not always, like, heavy-duty environmental remediation, but also decommissioning of nuclear power plants.
It's gonna be a huge growth in this market, and we're a market leader in bringing the expertise needed in places like throughout mainland Europe, in Japan and Asia and other places. So we're really excited about how that unfolds. Beyond the UK energy trilemma, there is a large and growing trend of clean energy transition, and we are really well poised to take advantage of that opportunity. And I just again go back to the mission statement that John unveiled. Addressing the world's most critical challenges in sustainability, science, and security, this environmental market, we're right at the front of that. So we see a growing demand signal, portfolio of major projects now, big opportunity around SMRs and fusion, global new build, global decommissioning of plants that are to the end of their life.
Even working with partners like Australia to contemplate a brand-new regulatory regime to handle nuclear submarines. A lot to be excited about. That's environment. Let's go to the second market, space. Again, this recurring theme of leveraging advanced engineering and technology expertise and a leading position in this market. Now, when we talk about space today, we're gonna include four areas. Number one, space exploration. We are today, and have been for many years, the number one, bar none, number one provider of engineering and science service to, services to NASA. We operate across their entire portfolio of missions. We also see opportunities to have a larger impact with NASA as we go, so we're excited about that. National security. We're supporting DOD's Air Force, Space Force, Missile Defense Agency, and maybe some I'm not even thinking about, working priority missions to ensure U.S. space superiority.
People, it's a contested domain, and people today refer to space militarily as the ultimate high ground, and we're right in the middle of that activity. Also, if you talk about space, you have to include intelligence. Our team right now today is developing next-generation technology, our technology, Amentum technology, that potentially will redefine the future of space-based ISR missions. We're excited about how that technology has proven so far, and we believe this is a market that can truly allow us... in which we can truly become a market leader. Very excited about where that's headed. Then the final thing I'll just mention is the commercial space economy. The projections for the future are large. I will tell you today that this is a little bit more about specialty consulting for us, kinda green shoots of opportunity.
But the fact is that there are some things that can only be accomplished in microgravity. People contemplate advanced medicines that we cannot compound here on Earth. People think about additive manufacturing, that you really can't get the full- you can't do some things unless you have the absence of gravity. Of course, we're all familiar with tourism. So there's a growing set of opportunities that we can envision happening there, and we believe our Amentum is perfectly positioned to help enable some of these commercial ventures. It is absolutely a competitive landscape. We're not the only company that sees the importance of space to the future, and if you look at the customers lower... or the competitors, lower right, they kinda fall into two categories. One are OEM or platform-type companies, and then the other is more of a services company.
One of the things we really like about bringing these two businesses together and forming this new Amentum is we actually have strong features of both. We have OEM-like traits and capabilities, and also have the ability to deliver solutions in the form of services. So let's just dive into our differentiated capabilities for on this slide. I'm gonna start with space mission development and integration, and before I go through the four quickly, I'm gonna tell you that one of the unique traits we're so excited about is we do an intensive amount of work in the most complex space missions, but we also do an incredible amount of work on the space systems and hardware side. So both missions and hardware, that dual expertise is something that is a defining characteristic of Amentum.
And if you look at the space mission side, certainly there's a lot that we're doing with respect to mission solutions for NASA. I've got a quick case study about Artemis in a minute, but you may not know that our Amentum team today is, there are people around the clock monitoring space debris to ensure the ISS is safe. We're doing that. Maybe you've, just in recent months, have heard about the OSIRIS-REx mission, where we had the audacity to land on a asteroid and get some of the asteroid material, bring it back to Earth. NASA, a great NASA mission. We had a lot of key roles in that. Kinda after we got the material, after it reentered the atmosphere, kinda parachuting it safely, collecting, we kinda took care of the final piece of that mission.
A lot of pressure, too, let me tell you. Let's make sure we handle that one right. Precious cargo. But then you go to look at something like the Missile Defense Agency. We have the IRES contract there, Integrated Research and Development, Engineering, and Services. Integrated R&D Engineering Services. We've just worked with MDA to develop what's referred to as MDSEA, the Missile Defense Space Enterprise Architecture. This is very significant. In the near-peer competition, the evolving threat around hypersonics, we have helped work with MDA to define what is the space architecture we need to counter this evolving hypersonic threat? Really proud to have gotten that done. We're now working with MDA to develop some of the component technologies to bring it to life.
John mentioned this NISSC II contract, where we have people in Cheyenne Mountain vigilantly keeping a watch on what's happening overhead, but also, as part of that same contract, using agile software and tool development to insert new technology into that mission to make sure we're taking advantage of the evolving threat. ISR, I mentioned that we're developing unique technology for the IC and DOD. It is very much an exciting and growing part of our business, and we do a lot with spaceflight hardware beyond ISR. NASA has always trusted our team to develop everything from spacesuits to the Environmental Control and Life Support System that keep the astronauts alive in the harsh environment of space, but even spectrometers and some of their most exquisite and advanced scientific instruments. We're proud of the expertise we have there.
And finally, under network, or next generation's network and satellite communications, it's actually a very important area, and we're doing work. If you think about it, it cuts across NASA and science and national security and intelligence, so it's a very important topic, and our teams have really been working to develop the next generation solutions, including for our own ISR technology. Now, as it turns out, some of the things we're doing are incorporating edge compute and some very advanced algorithms that simply allow all of these systems to be more responsive, more successful. Again, taking time latency out of these communication systems, very critical when you're thinking about countering a hypersonic threat. So we're really excited of the progress there. And if you look across these capabilities, I would submit to you that a recurring theme is that our Amentum team is expert at complex systems integration.
That's one of the key capabilities that we bring in growing in this space market. Talk for just a couple minutes about Artemis. It's such a great story for Amentum. If you go back to the beginning, our teams at NASA Langley in Virginia, all the wind tunnel testing to validate the basic design. NASA Ames on the West Coast, all the arc jet testing to ensure re-entry would go well. We worked with NASA Marshall in Huntsville to develop all the propulsion elements and also to develop the flight control software. Our Amentum team at NASA Stennis tested all of the actual rocket engines. At JSC, Johnson in Houston, we developed, did all the basic engineering for the Orion crew capsule, as well as a lot of the testing integration work.
We developed the parachute that brings the Orion capsule safely back to Earth at the end of the mission. And then in Kennedy, NASA Kennedy, where the launch occurs, we receive all of the subsystems from Boeing and Lockheed and Northrop, and all the great OEMs that are providing a part of the rocket. And our Amentum team, we build the rocket, and as we do so, we keep track of every nonconformity, and we work every nonconformity to resolution to ensure a safe space flight. We also developed the launch control software. And so if you think about all of the things that our Amentum team did to develop this mission, and we were there on the ground, November 16th of 2022, counting down for that launch, it was quite a moment.
To see that rocket launch well, travel safely to the Moon orbit, come back, and mission success. Yes, it was the Amentum team that actually collected the crew capsule out of the Pacific Ocean after it touched down. Just really a proud moment for our team. The significance to the business, beyond just the great accomplishment, was that in 2023, that stellar performance allowed us to win the recompete. Highly competed. Service companies, OEM companies alike, trying to win that contract. So we were proud to win it, and we'll be there for the next 10 years, really kinda integrating and supporting those missions.
But more than just the mission technology side of things, we've been able to work with our NASA customer upstream of the procurement to say, "Okay, Artemis One was heavy R&D, first time through, making sure these systems work." But we were able to design with NASA mechanisms into the contract, which we've now won, that will allow us, as the Artemis missions take on a more operational cadence, for Amentum to take ownership of a bigger swath of that mission, grow our scope. We're really excited about that. Also, alternate commercial models that will allow us to grow margins as we grow. So we're really excited about the business opportunity. So if we wrap up the Amentum opportunity in space, we do see a lot to be excited about.
That is certainly the case, and at the root of it is our advanced engineering and technology expertise, the deep domain know-how that we have from being in a leading position in the sector, key tailwinds that all of you understand, the continued proliferation of space assets, the global connectivity that's needed in today's world, and a lot to be excited about in terms of the future scientific developments that will come out of our aggressive exploration program. So we're excited about that. I will tell you, a trend that is ripe throughout all of these different use cases in space is digital engineering. Our teams are literally, right now in this time, transforming the way these missions are executed. All design with NASA DOD model-based systems engineering. As we develop software tools, it's all... You know, the traditional ways are gone. Agile methods are the norm.
We're doing things like DevSecOps, so there's a lot, it really is a high season of transformation in how we're executing these missions. I'm gonna cover one more market, and then we'll get to Jill. Quick coverage of the intel market. The intelligence community and their missions become more critical every day. It's a strong and growing market based on the real need in today's world. This is one of those where legacy Amentum and legacy Jacobs both had nice businesses, but not market or sector-leading businesses. But when we come together, there's a scale that kinda day one defines us as a market leader. But more than that, there's now an array of technical and engineering capabilities that positions us as a solutions leader for the intelligence market. So we're excited about that.
When you look at Amentum today, we are active with all 18 of the intelligence agencies, spanning both the intelligence community and DoD, and we have a long duration history of delivering for those clients. It's important to note that we're not delivering in this market, similar to environment, we're not delivering solutions just in the U.S. We have impressive activities and support relationships with several of the allied nations within the Five Eyes community, a significant presence in the U.K., also within INDOPACOM. And if you think about some of the geopolitics that are driving today's world, that is a strategic advantage for our customers, that we have those kinds of highly cleared, highly skilled people in those geographic places of interest. So if, if I were gonna spotlight key capabilities, it would start with all source intelligence and analytics.
There is a tremendous wave of technology development and rapid insertion into the mission. Think about trying to ingest the veritable mountain of data, and if you could do so in an automated way and get to the, the needle in the haystack, if you will, that you need for actionable intelligence that impacts the mission, Amentum teams are really working on developing many of those technologies. Software development and engineering. Software development engineering is a huge activity for the company. Specific use cases benefiting absolutely from artificial intelligence, but we are doing so in a very controlled and secure way, and our teams are involved in every element of counter-threat. You can think of cyber threat, you should also think of physical threat, and there's a continuum of analysis and detection, as well as counter-threat activities that our teams are involved in.
So a leading leading presence in the mission, comprehensive solution set, large and highly skilled workforce, strategically positioned. All of this translate, we believe, to a truly exciting growth opportunity. A quick case study, I'll cite the Defense Intelligence Agency, their SIA III contract. This contract is a multi-award. You can see, really large, 10 years, $17 billion ceiling, and I think as many as 10 large businesses have contracts there. We Amentum are really proud because we not only have a long-term history on the contract, but we do a pretty good job of winning more than our fair share of the work on the contract. We have this engine to be able to take advantage of some of these IDIQs, something we see as opportunity for the future.
The contract is focused on two things: number one, can you deliver high-end, high response, fast response, analytics capability for some of the most pressing issues in the globe? And number two, the contract vehicle is used to develop some of these advanced analytical tools to ingest, analyze, and provide an outcome of actionable intelligence. We're doing great work on that contract, and I will tell you, this is one of those where our globally positioned workforce across the Five Eyes strategic allies, is truly a key asset for the intelligence community and their key missions. So intelligence absolutely is a priority market. It's one of those that just really comes to life as you bring the two incoming businesses together, and there are a lot of tailwinds here, and it starts with the geopolitical tensions that are inherent to today's world, the proliferation of data.
There's great advantage and opportunity in that. There's also a larger risk profile as we become more and more reliant on data. The evolving nature of the cyber environment, we have a leading presence in doing all types of cybersecurity operations, certainly a lot of defensive operations, and I will tell you, a lot of other than defensive operations as needed. But this evolving cyber situation requires. It's a very dynamic. So our teams are constantly adapting to the latest in the threat environment, and in turn, we're counted on to provide the latest in cybersecurity training to more than 2,000 U.S. government employees every year. Capabilities like software development and engineering, signal processing analytics, edge compute, some of the things we've mentioned, these are key technology enablers to the future solutions.
Because of our capabilities in these areas and the large volume of mission execution that we're doing, we actually see our Amentum as strategically positioned at the nexus of intelligence analysis, cyber operations, and future technology. Really proud of our team, more than 3,000 multi-source fusion data analysts located throughout the globe, and for us, the growth strategy is clear. Lean into our existing client relationships of trust with a more comprehensive solution set, a larger force of highly cleared, highly skilled employees, increased depth of advanced engineering and technology. We're very excited about the growth opportunity in intelligence. So now I'm gonna cede the floor to Jill, our CTO. She'll come up and talk about defense and civilian market.
Thank you, Steve. Hi, everybody. I'm really happy to be here. Over the last few months of working with Steve, I really appreciate his collaborative leadership, and certainly, you can tell a real depth of technical knowledge, so it's lots of fun to geek out with him. Let me tell you a little bit about myself. I'm Jill Bruning, privileged to be the Chief Technology Officer of Amentum. I started my career as a mechanical engineer, working cryogenic technologies for a small research and development company for space. My company got bought by a large IT company, so I spent the next few years working enterprise IT systems for convergence and consolidation of networks within the intelligence community. I've been at Amentum 13 years. I started with URS, that went to AECOM, and was part of the team that launched Amentum.
So I've been through several changes of control, but this, by far, is the most exciting one. So I'm gonna talk to you first about the defense market. Defense is our largest and most addressable market, as you can see from the numbers, and as a service provider, we tend to have steady, long-term contracts in this market. These tend to be cost-plus contracts. You know, the defense community has a more expanded and complex battlefield than ever before, and it's layered with a rapidly changing threat environment. We have technology experts in all areas of the digital domains, and one of the discriminators with Amentum in this market is really the full lifecycle capability, end-to-end, from the very beginning of the lifecycle in research, development, test and evaluation through the engineering. And when we say all domain, we mean land, sea, air, cyber, space.
You heard Steve talk about some of those as well, and we really have capability across all of them. A huge demand is really in the command and control, communications, cyber, and ISR systems, and you'll hear from some of the case studies and examples throughout this presentation that we really are a market leader in these advanced communications. And then, through the operational side, through logistics and supply chain, supporting the operations across this full lifecycle. One of the things in this market that we've done. As we go through this integration, we've had some time, as you've heard from John, about working on our culture, and as part of that, we did some employee surveys.
One of the things that came back on both sides with Jacobs and Amentum, very high from our employees, was rated that, "What I do matters." It's huge for our employees, especially in this market, where we have a lot of veteran employees who are out co-located with customers on these missions. We're trusted with long-term relationships in this market across all of the services: the Navy, the Army, the Air Force, the Space Force, the Marines, the Special Forces, not only in the U.S. market, but in our partnerships with the defense departments of our allied nations. In the U.K., we're one of 30 companies providing strategic support to His Majesty's government. In Australia, we're one of four strategic partners. So we are in a trusted position to perform and be the go-to to provide advanced engineering and technology solutions across this market.
We're proud to be a market leader in defense, and let's talk about some capabilities. With the challenge of near-peer adversaries, the military needs new advanced engineering solutions to prepare, train, and execute in all the domains. Starting on the left side with research, development, test, and evaluation, these are contracts exploring new technologies on the front end of the lifecycle. We talked a little bit about IDIQs in previous presentations. One of the largest for RDT&E is the IAC-MAC contract, which you see there. We're proud to be one of the top-tier contractors on that IDIQ contract. Additionally, we won last year the prototype contract for the Army to integrate new technologies and engineering C5ISR solutions to design, develop, fabricate, and integrate command and control systems and communication systems and sensors on ground, airborne, and watercraft.
Amentum also has one of the largest contracts in the INDOPACOM theater that provides equipment and infrastructure in Guam. You know, our infrastructure support not only includes critical energy equipment, but also the networks and navigation needed for our submarine fleet. So let's expand a little bit more on INDOPACOM, where Amentum is truly a market leader and has incredible capability to support that demand. You know, the INDOPACOM theater is an intricate challenge. It is the largest and most diverse theater. It covers more area that, of the globe than any other combatant command. It is also a multi-domain environment with integrating land, sea, air, and space within the environment. It also requires integration with allied nations. We were successful at winning the I-TEAMS contract that you see here to support INDOPACOM headquarters with advanced technology and experimentation and analysis.
One of the reasons we were successful winning this contract is because we got the opportunity to bring our scientists and engineers into an oral presentation with an operational scenario where they performed exceptional. We provide support to joint experimentation. We have Amentum-developed network solutions designed for battle management, command, and control at both the classified and unclassified levels. We designed and deployed a Joint Fires Network for communication during exercise. We're responsible for joint personnel recovery operations and provided innovations to improve software applications for multinational collaboration across South Korea, Australia, the Philippines, and Japan. We designed and developed integrated wireless router protocols for network solutions that facilitate mobile communications with rapid plug-and-play functionality that we can set up in minutes and provides advanced security throughout the theater, as well as integration with our allied partners.
We created an innovative multinational common operating picture that integrates ultra-long endurance unmanned systems. We perform complex simulations that use gaming software and AI to rapidly deploy new technology. Amentum's advantage in this theater is significant because of our on-island presence and our special-focused technical delivery teams. We're proud to use our technical and advanced engineering skills to strengthen the INDOPACOM deterrence and to build a resilient security architecture for our modernized joint force. As Steve talked about with the intelligence community, geopolitical tensions exist around the globe and into space, and threats evolve and change rapidly, so advanced next-generation technologies are needed faster than ever before. Having full lifecycle capability is a competitive advantage for Amentum and our long-term trusted relationships. No other company has the capabilities at scale that we do. Contested supply chains require innovations in technology in order to overcome operational constraints.
We have a long relationship. We talked about the pointy end of the spear. It's like the pre-pointy end of the spear is our work with, with DARPA, the Defense Advanced Research Projects Agency. One of the reasons this contract has been so interesting for us is we get the chance to hire world-class experts that are doing research in AI, cyber, hypersonics, autonomy, and not just like drones in autonomy, but things like unmanned helicopters and other aircraft. So our DARPA program has really provided a wealth of technology and talent for us. We're the leading provider of unmanned systems, to include satellite launch and recovery operations. We're proud to support the challenges of supply chain anywhere in the world and using our analytical and predictive tools to make sure our defense forces maintain readiness.
As the pace of technology moves faster, our defense customers are looking for more non-traditional systems integrators, like Amentum, who are trusted partners and who can deliver at the speed of need. Now, let's move on to our last market. This is our civilian and commercial services, and Amentum delivers a diverse set of solutions, most of these focused on efficiencies and outcome. Like the adjacent defense market, we have long-term, trusted relationships with Department of State, Department of Homeland Security, Department of Transportation, Department of Justice. This is an attractive market for us because a lot of the contracts in this market are outcome-based, which means you're contracted for transactional work that might have service-level agreements or key performance indicators, and generally, these are outcome-based, fixed price, so essentially an outsourced model.
So the opportunity in this market is we can bring some of our technical solutions, like software automation or data analytics, to improve the services, which makes the customers or citizens happy, and also to improve margins, which hopefully makes all of you happy. All right, so we're gonna talk about some of the capabilities in this market, starting over on the left. Integrated biometric solutions. This is the contract down on the bottom for Department of Homeland Security, where we collect biometrics for DHS at nearly 140 centers located around the U.S., and we won that recompete again last year. These are people going through the U.S. citizenship process, and we use analytical tools to maximize workflow and optimize efficiency. As I visited some of these centers, I'm very impressed with the people culture that we have....
It's a pretty scary process to go through, becoming a U.S. citizen, and some of our employees even learn phrases in foreign languages to be able to help make people feel more at ease as they're coming in for their biometrics. We have an exceptional capability in processing analytics and the IT infrastructure behind that. We perform processing services for the Department of State around the globe for U.S. visas. We developed a modernized cloud-based software tool that includes mobility for applicants, so they can check on their cell phones. And then when it's a rules-based approach for the government, for the Department of State, where they can tailor. As situations change around the world and visa requirements could change within an individual country, it's tailorable without going back and having to do software changes to adapt to changing market conditions.
We're even using AI to enhance the customer experience. Over on the right side, Amentum is trusted to respond wherever urgent needs arise around the world, and we have the capacity and global presence to deliver solutions. For example, during COVID, we stood up mobile hospitals, we provided medical staff, doctors, nurses, technicians, the IT infrastructure to support them, wearable technology. We also support Pfizer at their research and development facility, where I got an opportunity to visit shortly after COVID, and was told by the customer there that without our support, the vaccine would not have been ready in time, and that we were a trusted partner to help them succeed. For DHS, you've heard a couple of times about counter-drone technology. You know, there's a massive proliferation of the drone threat.
We have a contract for the research development, test and evaluation, prototyping and integration work for countering drone threats. And at nearly every world event, like a Super Bowl or a national convention, our team does the threat analysis, we bring prototype and integrated systems during the event, and we do the post-event analysis after. We're counted on and trusted to provide the very best technology and solutions. Amentum's broad capability, trusted relationships, and innovative solutions are formidable in this market. Now let's look at a case study. This is our Treasury Seized Asset Program , another one that we re-won last year. As you noticed in a lot of the case studies we presented today, they have been recent win recompetes.
I can just say, going forward, there are no material, large recompetes in our portfolio over the next few years, 'cause you can see, we just won them all. This is another large and complex program. The other thing I want to say about the complexity of these, of these huge programs, it's really important to have the program management skills to manage and execute programs of this size, scale, and complexity, just like the ones that Steve was talking about earlier. We provide our program managers with a comprehensive and integrated set of web-based and mobile tools to make sure they have insight and visibility to finances, equipment, vendors and subcontractors, payments, staffing, training, risk, and safety. We also share program management best practices through an employee-led business resource network.
So we're very proud of the work we do and our program managers across all of these outstanding programs. This particular contract is very diverse and complex. We get orders from the Department of the Treasury to go seize assets. Very huge variety of potential assets we could be asked to seize, and complex because it can be multiple events needing to occur simultaneously anywhere around the globe. So it's diverse and complex, and a full lifecycle asset management, requiring a strict chain of custody throughout the process.
We also run the disposition auctions. If you go to the Department of the Treasury website, you can look at the online auctions. We do them in person, too, and it'll say, "Powered by Amentum." We've built an automated system to track activity, so we're very proud of this work that we've done for a very long time for the Department of the Treasury.
Now let's talk about growth strategies in this market. It's really about using technology to drive efficiencies. The citizen experience, as we all know, is ever-demanding. We all want more transparency, we want mobility, we want apps, we want to know where things are. And then on the back end, making sure it's about having the business process efficiency to drive those higher margins. In the background of those applications is the need for modernized infrastructure and enabling cloud-based solutions. And unfortunately, humanitarian events continue to emerge. Amentum is perfectly suited to manage and execute contracts in this market. We have the contract vehicles and the customer relations to succeed.
We take advantage of technologies such as blockchain that we use for the Department of the Treasury Financial Crimes Enforcement Network to investigate financial crimes like money laundering and terrorist financing. We have the analytical software and automation experience to deliver the higher profit outcomes. We have a history of successful performance, and we are strategically placed to grow. This concludes our market overview, and now I'm gonna turn it back over to Steve to sum up.
Great.
There you go.
Thanks, Jill. I absolutely recognize that I'm in the unenviable position of being between this room and lunch, so we just wanna finish off with one, I think, very important point. Jill and I, we tried to kinda take you on a quick walk, if you will, through these five markets, give you a sense of some of the advanced engineering and technology solutions that we're delivering for some of the most critical missions, and even a perspective on kind of the opportunities, the notional opportunities for growth. But we wanted to kind of bring that together and talk more specifically about how we really are going to go, move the needle, and drive a growth agenda within the new Amentum. Now, until we close the transaction, we are not able to work details of each other's pipeline. That would be anti-competitive, so we're not doing that.
But what we have done, as part of our integration management office, we've put together organizational solutions to integrate technology centers of expertise, business development solutions on how we're gonna go to market, and here are kind of the government co-governing concepts. Number one, we have an opportunity to go identify, execute, and grow with an expanded pipeline in the markets that today we serve. This includes additional large enterprise contracts, where neither of the incoming businesses had all of the pieces, whether it be solution, past performance, those or client relationship, to go after these opportunities. There are new opportunities that are absolutely in our wheelhouse now. Consider that Amentum, on day one, we have won and are executing well more than 30 single award contracts valued at more than $1 billion.
We have a proven track record of being able to go solution and win these opportunities. Consider also that today, in places like NASA Johnson and NASA Kennedy and the Missile Defense Agency and even NORAD, we won that work away from OEM companies. Because of our advanced engineering and technology know-how, within markets where we're recognized today, we have a strong opportunity to continue to move up the value chain and take work away from some of those companies. Secondly, we have the opportunity to grow in new markets. There's leveraged capabilities that we've developed in these government markets to bring to exciting new parts of the sector, including commercial opportunities. I'll tell you today that people are excited about the end-use case of artificial intelligence, but we Amentum have kind of thought ahead a little bit about the implications of AI for things like data centers.
The intensity of compute's so much higher. There are cooling challenges. There are all kinds of system control challenges, and we're working right now to pioneer and deploy solutions for some of the big names you know that provide cloud services and all that. In the commercial space, there are key opportunities for us to go leverage our technology know-how. Thirdly, we see the opportunity to accelerate international growth. We've talked about the great footprint in the U.S., the U.K., and Australia, and you think about programs like AUKUS, that's great. But you may not know that Amentum is supporting the U.S. government with solutions in 78 countries around the globe. We will be a unique resource in terms of being able to deliver and execute the most important critical missions the world over.
Together, not separately, but together, these businesses, the new Amentum, for the first time, is positioned to go after some of the largest contracts in many of these geographies. We're excited about that incremental opportunity. John mentioned, and we believe, that there's a great opportunity around our combined $45 billion of ceiling in IDIQ contracts. A lot of these represent opportunities to deploy into new missions the engineering and technology know-how we have, and we see that a lot of this work represents incremental margin opportunity as well. Finally, both, both incoming businesses have a history of being able to deliver on contract growth, to take on more and more of the client mission and deliver in a trusted way.
Some of our enterprise contracts, we see what I'll call conversion opportunities, where certain parts of the mission maybe go from cost-plus to us taking on ownership and maybe a different commercial model. We're excited about those things. I mentioned NASA Kennedy as an example. We also have a lot of fixed-price contracts in the portfolio, where now together and we look at the landscape of technology solutions, we can actually deploy technology for ourselves and reduce the cost required to execute some of our fixed-price contracts, which will in turn represent an incremental margin opportunity. And finally, blending together the enterprise contract world and our IDIQ access, we think there will be opportunities to leverage the IDIQ, higher tech, higher margin, to satisfy and meet demands that we identify in the mission out of our enterprise contracts. So kind of the ultimate cross-sell opportunity, if you will.
So while we're not working a single pipeline as one company today, we really see some great avenues to go deliver the growth. And with that, we'll stop for lunch. So please, help yourself out of the room.
... We'll return at 12:20 P.M. So we'll see you back here at 12:20 P.M. Thank you.
Welcome back, everyone. I hope you enjoyed lunch. We now have Jill coming back to talk to us about engineering and technology advantage at Amentum.
Thank you, Nathan. Welcome back, everybody. I'm excited about being the Chief Technology Officer at Amentum and being able to bring together technology across this amazing company. You heard from John earlier about how advanced technology and engineering is a powerful competitive advantage for Amentum, and you've heard Steve and I talk about our technical expertise and some examples of technology across all of our markets. Now I'm going to talk about how we leverage this significant engineering and technology depth to accelerate growth. I'm gonna outline our technology strategy to deliver on emerging technologies, how we invest in innovation, and how we expand solutions to new markets. So first, I'm gonna talk about our technical priorities. As you heard from John, these are the technical priorities that represent emerging technology trends.
In other words, these are pervasive technologies that go across all of our markets, and they're kind of on an accelerated hype cycle. These technology areas also align with our customers. So as we look at all of these market areas, those customers also have strategic technology priorities, and these four align with our—where our customers are going. So in addition to our own capabilities, which are deep in each one of these areas, these are opportunities for us to have strategic external partnerships as well, to make sure we're staying on the competitive and leading edge of these solutions. So let me start with digital engineering. We are really a market leader in digital engineering. As you heard from Steve, we have over 40 years experience. We have state-of-the-art tools and simulations. A lot of companies are talking about getting into digital engineering or starting.
Our journey is already there, very mature in digital engineering, to be able to support all of our customers across the spectrum of taking full advantage of the digital engineering capabilities and lifecycle. We have strategic partnerships with companies that do digital twin software and other simulation softwares that help enhance our digital engineering capability. We're now converging some of our system engineering models with digital twins, so side by side, you can see the impact of changing a technical parameter or a design parameter and seeing the impact real time on a digital twin model, and so really accelerating the advantages of digital engineering. What about AI? You know, we were actually doing AI and machine learning before it was cool to even call it AI.
We're using definitive machine learning for predictive analytics, trying to predict what's going to happen with assets and lifecycle support before it occurs. We've adopted a narrow AI approach, which means we're working with trusted data and making sure that we understand how that data learns from the large language models to make sure we have a risk-averse approach as we use AI and machine learning going forward. We've also been able to stand up an AmentumGPT, our own sandbox for generative AI, to allow our employees to have a safe playground to experiment with how they can bring generative AI into the equation. We've been training our workforce on AI and have hired leading-edge expertise in AI.
In cybersecurity, as John said or as Steve was talking about, we're trusted by the intelligence community to develop and train first responders in cybercrime based on the latest offensive and defensive threats. In smart infrastructure, another real leading area for us, for intelligent asset management, what this really means is highly sensed infrastructure that is giving you feedback that you can incorporate to be able to do more efficient and effective management, and includes commercial operations. We will be agile as we look at our focused priorities as new technology trends emerge. Another growth area for us is our centers of excellence. Advanced engineering lies at the core of Amentum, and one of our competitive advantage is our center of excellence enterprise. Each center brings specialized technology and innovation to drive progress.
As I visited some of these centers, I am just inspired with our impressive scientists, engineers, and analysts working on the toughest problems that exist. But combining this virtual ecosystem will bring an unmatched expertise and deliver something truly unique in our industry. We have a strong culture of collaboration, which means Amentum teams can leverage innovation and share knowledge and tools across this enterprise. We have nearly 4,000 engineers and technology employees working in our centers. This helps us attract, retain, and develop skilled, specialized engineering expertise. This also provides us with reach back and high-end capacity for customers to ensure we deliver on our contract performance. It also ensures high customer retention and improves our PWIN for new opportunities to have this kind of capability. This is an industry-leading, vast engineering capability that will be accessible to all of our employees and customers across the globe.
Now, I want to just do a case study for you and highlight one of these centers and how we've used it to grow new work. So one of the subsets, and Steve hit on it earlier, is a subset of digital engineering, is model-based systems engineering. We've been supporting the Naval Surface Warfare Center at Crane, Indiana, for about the past 15 years, and four years ago, we stood up a special capability in model-based systems engineering. Some of the benefits of using models include lower cost, faster development, repeatable processes, and greater agility and flexibility. We invested in state-of-the-art modeling tools and 3D simulation tools for the engineering, design, and integration, you know, electrical systems, mechanical systems, reliability, safety, structural, making sure we had the suite of portfolios needed to build the models for our customers.
But MBSE was relatively new to some of our customers, sort of a paradigm shift in modernization initiatives to use system models. So we also developed training and a playbook to be able to have repeatable solutions in these modernization initiatives so that we could incorporate the models with the acquisitions. And by putting all of this together in an offering, we were able to win almost $1 billion of new work where our MBSE approach, in combination with the training, the playbook, was a strength in these proposals, supporting microelectronics, hypersonics, and electronic warfare. We will continue to progress offerings like this throughout all of our COEs and our priority technology areas. So how about technical solutions that are not in a center of excellence? You know, many of our employees work out at customer sites, where they're developing solutions on specific programs and contracts.
So one of the strategies for growth here is about leveraging horizontally, leveraging from a specific solution on one contract across to accelerate growth on other customer needs. What you need to make this happen is really an enduring culture of collaboration, not just with employees, but with our customers. We have an enterprise framework for technical knowledge sharing, and I'm pleased in the CTO to be able to lead that initiative. We have technical connection teams, which are employee-led. These are environments where technical people get together, and being a technical person myself, we love to get together and talk about technology and what we do and share information and knowledge. We have lots of these across our organization. One of our most active is our AI technical connection team to illuminate the great work we do and accelerate growth.
We also have innovation sprints that we run. We host technical exchange meetings where people can come and talk about the technologies within their programs. We've had hackathons standing up a large language model. We have a One Javelin app, which is a mobile app on their phone, where people can get information about technologies. We also have a podcast called Amentum: What the Tech? It's on Spotify if you wanna go listen to it. You can hear some of our experts talk about some of these technology areas. We also have a very mature growth model, where we put the very best talent on our most important opportunities and largest pursuits, and we make sure we have corporate-level engagement and oversight on our large opportunities. So I'm gonna give you a couple examples of how this works.
We've talked a lot about the unmanned systems. You know, it's really a prevalent and malicious threat that is rapidly changing. We provide command, control, and operations for the Air Force for over 12 years. We took the people who were working that program, and we said, "Hey, we'd like to expand this to the Marine Corps for operations of their unmanned system." Same system, just different service. The Marine Corps operations were done by the original equipment manufacturer, and they were hesitant to talk to a service contractor. But we went in, and we were able to talk to them with our technical people that we used on the Air Force contract, and they said: "Okay, you guys can bid on this." And we were successful at winning it because we brought innovation, we brought creativity, and we brought the expertise.
And then, following the transition after we won that work, we were told we executed flawlessly, so that program's going well. We also have hardware capability within the unmanned community in the intelligence market, and as John pointed out, we've also been able to bring that capability together into the counter-unmanned area. In microelectronics, we have expertise on our DARPA program that we were able to bring to help the problem with the Department of Defense. If you remember a few years ago, we all couldn't get cars because there weren't enough chips. So the whole supply chain of semiconductor manufacturing has gone international, and that's a problem for the U.S. Defense Department. They wanna have secure supply chain. There is now appropriated funds under the CHIPS Act that are now available, and procurements are starting to come out, and we're in a great position.
We've already won work for the Navy, where we're supporting the research and development, secure supply chain, open source, analysis of commercial work in the semiconductor industry, and now being able to support them in having the government have their own one-of-a-kind test facility for radiation-hardened microelectronics. On the aerodynamic systems, Amentum is truly a market leader, as you heard from Steve, in wind tunnels, one-of-a-kind test facilities for NASA, being able to bring that capability as a go-to provider for commercial applications like race cars, as well as general automotive, and then as we advance that into to hypersonics or underwater launching test facilities for the DoD.
And lastly, in communications, especially wireless, where you need the expertise and the credentials in the commercial work that we started with AT&T and we're now supporting—you know, it started with 4G, 5G, now it's going to 6G, to design, build, and operate the most complex and secure communication needs. We're very excited about the engineering and technology potential at Amentum that continues to drive growth. I can't wait to get started and bring our engineering and technology to advancing the future. With that, I'm gonna turn it over to our great CFO, Travis Johnson.
Thank you. Thank you, Jill, and good afternoon, everyone. It's an honor to be here with the existing Jacobs investors and our equity research community as well, and I'd like to offer a warm welcome to those of you that are newer to the Amentum story. We also recognize that we're right in the middle of summer vacation time, so we really wanted to just thank you for your time today and thank you for your interest in Amentum. Over my career in government services, both Jacobs and the legacy Amentum businesses are companies that I've admired. It's been a little bit over a year now, since I started with Amentum, and believe it or not, on my very first day, John asked me to come into his office, and he told me about this potential transaction.
Needless to say, I was really excited about the potential of bringing these two great companies together, and as you can imagine, my first 90 days looked a little bit different than I thought they may look. But it was really a great opportunity, and here we are today. I've also had the opportunity throughout my career to be part of some of the most transformational spin-offs, mergers, and acquisitions that have shaped what our industry has become today. And what I can tell you about this merger, the combination of Amentum with Jacobs Critical Mission Solutions and Cyber & Intelligence business, is that it's a powerful combination. It's unlike any that have come before it. I do think the team did a really good job this morning of explaining why that's the case. Started out with Steve.
Steve told us really well about the complementary nature of the businesses that are coming together and the merits of the combination. Then John articulated well the differentiated position that Amentum is gonna have in the marketplace and our strategic approach to drive long-term value creation. And then Steve and Jill provided great insight into the advanced engineering and technology solutions that the company has, how it's gonna position us for growth in large and growing addressable markets. It's really everything that the teams covered today that enables the strong financial profile that I'm excited to tell you about today. Let me start with a few highlights. First, with $14 billion in revenue and approximately $1.1 billion of adjusted EBITDA, Amentum will be an industry leader.
It'll have $47 billion in backlog, representing 3.5 times revenue coverage, which provides significant and predictable visibility into our earnings and also a solid foundation for growth. Second, from a stability perspective, in addition to the diversity across end markets, customers, and contracts that John noted earlier, the new Amentum is gonna benefit from 65% of our contracts being cost-plus in nature, obviously providing stability and minimizing future downside risks. And over 86% of our revenues will come from prime contract positions. This allows Amentum to be close to the customer, while at the same time optimizing program financial outcomes.
And third, as a result of our capital-light business model, only 0.3% of revenues each year is spent on capital expenditures, as well as our successful debt offering that we recently completed, Amentum will generate substantial free cash flow, which will enable de-levering to our target net leverage of 3x within 24 months of close. We're really excited about this financial profile and believe it will position Amentum well to drive sustained, profitable growth as we move forward. But before we talk about the future, which I know you all are excited to hear about, let me first take a brief minute to talk about our recent financial performance. As you can see, Amentum has a demonstrated track record of growing the top line while also expanding margins.
From fiscal year 2022 to fiscal year 2024, we expect revenue to grow by approximately 3% on a CAGR basis and adjusted EBITDA to grow nearly double that. I will note that there were some one-time events that occurred during this time frame, the largest being work that came to conclusion as a result of the withdrawal from Afghanistan, which obviously impacted the growth, growth profile. But after normalizing for these items, organic growth was around 5% on an underlying basis. As I'll talk about shortly, both growth and EBITDA margin expansion are trends that we expect to continue and more importantly, accelerate as we move forward together. One of the key benefits of the transaction that will help us do that is cost synergies.
Cost synergies not only help us drive margin expansion, but also improve our competitive positioning in the marketplace, allowing us to have higher P wins on our recompete and new business pursuits. We've talked a lot today about how we've taken advantage of this opportunity between signing and closing, approximately 10 months, to work together, both teams from the legacy Amentum business and the legacy Jacobs business, and we've done that in this area as well. We've utilized a proven integration playbook from both, both organizations' past acquisitions to identify $50 million-70 million worth of net, highly achievable cost synergies. As you can see, the estimates are conservative relative to precedent transactions, and the IMO really has taken advantage of this opportunity to develop robust value capture plans, and they've identified that these synergies will come from three primary areas.
Those areas are, first, integration of our enterprise systems and IT infrastructure. Second, the consolidation of our operating go-to-market structure, as well as our back-office functional support organizations. And third, obviously, as a global company with 53,000 employees, you can imagine we have some facilities in similar geographic regions, and we'll look to optimize that facility footprint as we move forward. We do expect the synergies will be achieved on a full run rate basis within 24 months of close, with roughly half of that within the first 12 months. Shifting topics a little bit, let me now talk about our capital structure. We're pleased with the outcome of our recently completed debt offering, which included a $3.75 billion Term Loan B, a $1 billion senior unsecured note, and an $850 million revolving credit facility.
With the earliest maturity in 2029, the offering solidifies our capital structure over the next several years, while at the same time providing flexibility to pay down debt to enable us to meet our de-leveraging objectives. It actually is really good to be in this position to not have to worry about this over the first few years and coming together and allow myself and the rest of the leadership team to be focused in other strategic areas. I'll also note, at closing, 60% of our debt will be fixed. That includes $1.19 billion worth of interest rate swap arrangements that are already in place, and our weighted average cost of debt will be around 7%.
With the new capital structure in place, we have a clear path to meet our net leverage target of 3x within 24 months, and we're really excited about the strong liquidity position that we'll have in place to support continued growth. With that in mind, let me spend a few minutes just talking about our fiscal year 2025 guidance. I'll start by noting that one of the things that we learned as we've been working together over the last several months is that both Amentum and Jacobs have a similar approach to developing forecasts and outyear plans. Our views for fiscal year 2025 and the outyears that we'll talk about shortly are informed by a bottoms-up, program-by-program build and expectations for recompetes and new business on an opportunity-by-opportunity basis....
We expect revenue in the range of $13.8 billion-14.2 billion, representing 3% organic growth at the midpoint after normalizing for the SciTech ramp down. I'll also note that our revenue range contemplates some near-term dynamics associated with bringing the two businesses together, such as cost synergy impacts on our cost plus programs, as well as some minor pipeline overlap. We fully factored that into our guidance. We expect adjusted EBITDA around $1.1 billion, which represents 8% margins when taking into consideration the synergies we expect to achieve within 24 months of close. From a free cash flow perspective, we expect free cash flow from $475 million-525 million, which are really informed by some of the key planning assumptions we provided for you here on the slide.
One of the things that we're really excited about is that over 84% of our revenue in fiscal year 2025 is gonna come from existing programs. The remainder, obviously, from recompete and new business. But we really believe this is a balanced and reasonable mix, especially given we're still two months away from the fiscal year start, and it really provides confidence in our ability to deliver performance within these targeted ranges. Finally, I'll just note from a quarterly sequential perspective, we do expect it to ramp up throughout the year as new program awards take shape and build over time. And then we obviously expect normal seasonality on cash flow as well. Q1 is typically our low point, and Q4 is our highest point of cash generation, given our fiscal year-end aligns with the government fiscal year-end.
Now, let's take a look at guidance beyond fiscal year 2025. We do believe our financial performance will begin to more noticeably reflect the benefits and synergies from the transaction. From fiscal year 2025 to fiscal year 28, we expect revenue growth of 4%-6% on a CAGR basis. We expect it to be enabled by a lot of the things that you heard about today. First, our differentiated position in large and growing addressable markets, our strategic approach to value capture that John covered earlier, and a solid foundation with $47 billion in backlog and only 10%-15% of our revenue up for recompete each year. We expect adjusted EBITDA CAGR between 6% and 8%, which I'll discuss in a little bit more detail shortly.
In terms of free cash flow, we expect CAGR north of 10%, which will really be enabled by our capital-light business model, an efficient working capital structure, and our plan to delever to 3x within 24 months of close. As I mentioned earlier, both legacy organizations have a track record of EBITDA growth and margin expansion, and we expect that to continue over the next several years. Let's talk a little bit about how we're gonna do that. Our plan includes a couple key areas of focus. First, I think we covered well, our robust value capture process, leveraging our integration management office to capture the synergy benefits, which we think will drive 30-50 basis points of margin expansion over the next couple of years.
Second, leveraging our culture of innovation and performance excellence, and through a continued focus on shifting our business mix, we expect to drive an additional 50-75 basis points of margin expansion. This team is committed to continuing strong operational performance and further infusion of technology into our existing programs and future programs, not only to drive margins, but also to deliver better outcomes for our customers. We're also committed to being strategic and disciplined in our bidding approach, taking advantage of our differentiated position and prioritizing pursuit of higher-margin opportunities. Yes, we do have a nice portfolio of long, stable cost-plus contracts that will generate substantial free cash flow, but we also have a portfolio of nice double-digit programs, and we expect that portfolio to grow over time by leveraging a lot of what we talked about today in the strategic approach that John outlined earlier.
In addition to that, we do see several other areas of opportunity that can either accelerate margin expansion or provide upside. Those are achieving cost synergies above the high end of our target range of $70 million, incremental benefits from further business mix improvements or the win of large enterprise contracts, which we've significantly factored down in our base case assumptions, and through inorganic strategic initiatives such as portfolio optimization or strategic M&A. All said, we expect these things will drive EBITDA margin expansion and EBITDA margins in the range of 8.5%-9% in the coming years. Before I hand it over back to John, let me end by covering our capital deployment strategy. As a publicly traded company, we recognize we have an important fiduciary duty to our shareholders, and we've developed our capital deployment philosophy with that in mind.
Obviously, in the near term, I think we've been pretty clear about what our objectives are, really focused on integration, focused on bringing these two great organizations together and realizing the synergies that will come from that, and deleveraging to 3 x within 24 months to close. But looking beyond that, we're committed to continue the disciplined approach and committed to a prudent capital structure that will enable flexible and opportunistic deployment, whether that's for continued investments in organic, profitable growth, strategic M&A, or capital returns to shareholders. And with that, I'd like to turn the presentation back to John for some closing remarks, and then Nathan will help walk us through some Q&A.
... All right, thanks, Travis. Let me make sure I get to the right slide this time and kick off. Just one slide to wrap things up. So our goal today is to have the opportunity to communicate to everyone kind of why this makes great sense, why bringing these two organizations together make great sense, and how. The second thing, the opportunity to explain to you who we are, what-- who is the new Amentum? And then take time to really go deep and talk about what we do, so that you better understand the strength behind our strategy. And then the opportunity that we have with our strategy to take the value of these combined companies and unlock the potential growth and margin expansion and cash flow that this combined business presents us.
Then, you know, in the end, really show that we can take a one plus one and make it worth more than two. I really commend my team for the great job that they did here today.
The thing I would like to hit on with you is, I think we've covered all these great topics in great detail, but the real thing that stands out to me is the effort that our combined team, working so closely together, the Jacobs folks and the Amentum folks, over the last 10 months, have come together working in a seamless fashion with no kind of sense of ownership of this, but a combined sense of, "This is our opportunity to create a great company together." It has been so strong and so impressive, and I just wanna do a shout-out to those employees from both companies that have worked so hard, A, just to keep two multi-billion-dollar companies operating while we've been working on all, bringing all this together. Two, working so hard on the integration effort over the last 10 months.
We've had hundreds of employees from both companies working, sometimes double duty, and making sure that on day one we can operate as a single combined company, and thank you to those folks. And to events like this, pulling off events like this, people have worked unbelievable number of hours and produced such great outcomes and helped us do what we did today and other events that we have planned. I just wanna thank all those people and all the employees of Amentum and Jacobs CMS and C&I. So hopefully you've got a great sense of why we are very excited about the potential of bringing these companies together and kicking off the new Amentum in just a couple of weeks. With that, I'm gonna open it up to your questions and invite my colleagues up onto the stage to hear your questions.
Please.
Oh, okay. Thank you.
Good job. That was the best. Geez! It's okay.
All right.
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Hey, good afternoon, everyone. Kristine Liwag from Morgan Stanley. My first question is, you know, now that you've had some time to spend with the two companies together, what's been the biggest surprise, either to the upside, that you've seen in terms of the power of this portfolio? And then, have there been any surprises that you didn't anticipate, and how did you manage that or plan to manage that?
Yeah, I'm gonna just hit... There's so many things, really, when we talk about the combination of these two companies. But I do think when you look at the history of the two businesses, and we talked about the fact there's not a lot of overlap. So we really have the potential to leverage our respective histories and capabilities. And the one point I would say is the engineering expertise. I think we really will be able to build of bringing the engineering and technology expertise of the two companies to create a true end-to-end capability that takes us kind of beyond the industry average.
Mm.
Where the industry, I think, is very focused on, I would say, computer science. We have engineering and technical expertise that goes from one end of the spectrum to the other. We talk a lot about nuclear, chemical, biological, data science. Just, I think that's going to be the most unique aspect of what Amentum represents and why we picked our mission statement to really reflect on the advanced engineering and technology capabilities of the business. And I talked about our strategy of having that as the centerpiece of driving strength in our solutions, on the bidding process and driving strength on our delivery capability is leveraging that end-to-end capability that bringing these two companies together give us. Surprises? I haven't really encountered anything yet. I guess if you want a surprise, I think it's how similar the cultures are.
Mm.
I, and it's a positive. I just, I've been able to get out and visit sites with Steve. Steve and I went on kind of a roadshow, but it wasn't just to go talk to people. It was an opportunity to get down and hear what people are doing, see the R&D, see the development activities, that each company has. I kind of brought Steve to some of those, he brought me, and what I found was, you didn't know you couldn't tell that you were at an Amentum site, you couldn't tell you were at a Jacobs site. We really have this similar working class culture, this idea of rolling your sleeves up, maybe a pocket protector or two, of really being excited about creating the front end of capability.
This idea that we share of our innovation and engineering expertise, but then also the technical expertise to work on that and deliver that so that it's not just the front end, but all the way through to execution. So we combine that. Both of us have that capability and that personality, and hopefully, that came across here today as well.
Great. Thank you. I left my pocket protector at home. I'll bring it next time. And if I could do a second question, maybe, Travis, on free cash flow, you know, it's clear you've got capital light business and a strong free cash flow generation. Your free cash flow outlook for 2025 to 2026 growth is greater than EBITDA. So the first one in, on that is, can you talk about the waterfall and cash? Are there specific or differences in the milestone recognition of cash between fixed price contracts versus cost plus contracts? And then also, in the long run, is there some sort of free cash flow to EBITDA target that you think is sustainable for the business? Thanks.
Yeah, thank you for the question, Christine. We're really excited about the cash flow profile of this business, the stability that it's gonna provide to, as I said, meet our net leverage targets. We do have an efficient working capital structure. Both companies have a culture that's focused on cash generation. We were, through this process, able to do due diligence on one another, right? And that clearly came across. And we do think that as we move forward together, looking at best practices, as we're gonna do in a lot of different areas as we come together, that there's opportunity for continued improvements in working capital efficiency. And then from a free cash flow growth perspective, we put that number out there, 10%+, to be reflective about how confident we believe that we can be in generating substantial free cash flow.
So yeah, thank you for the question. We're really excited about it as well.
Just a quick reminder to those who are on the webcast. Please put your questions into the chat box there, and we'll address them as they come.
Hey, everybody. Colin Canfield, Cantor Fitzgerald. Double clicking on the double digit comment from Travis on the margins. It sounds like it's maybe the mid-teens work at the KeyW portfolio. So maybe if you can kind of talk about your bid strategy with respect to scale versus some of that fixed price work, how you manage risk within a fixed price environment, and maybe kind of shedding a light on how the team thinks about risk with respect to converting cost plus work towards more fixed price work within that EBITDA margin target kind of framework. Thanks.
Well, I, I'll take a cut at this just from a business strategy standpoint, and Travis alluded to this, and I think it's a really important point, is that we have a large cost-plus concentration, and we're really proud of that. We think it's a strength of our business. But we also have 35% of our business that is fixed-price and T&M, and we're really expert at delivering projects that are fixed-price and T&M, and that's been pretty consistent for both companies-
That's right
... over the history, that we've always had this kind of large portion. And so we absolutely know how to bid, win, and execute fixed price and T&M type contracts. And of course, we articulated our objective is to take this engineering and technology expertise that, in our cost plus contract, is really at the front end of the spear. It is like at the development stage. It's the unique and innovative, creative elements of science and engineering, and a lot of that just is cost plus because the government can't define the requirements. Nobody would do that work on a fixed price basis, and the government wouldn't expect it. But that gives us unbelievable engineering and technology expertise that we have, over our history, been able to apply to fixed price and T&M type contracts.
Our strategy is to prioritize our portfolio, to bid more of these types of contracts that give us the opportunity to fixed-price and T&M so that we can expand our margins. Doesn't mean we don't like the cost-plus work, just the nature that we know if we wanna move the company forward from a margin standpoint and increase profits, we will prioritize that. I think we've had a history of successful delivery of fixed-price and cost-plus, and T&M, and part of that comes from the bidding process and how disciplined we are on the bidding process and the reviews we do to ensure that we've identified all the risks that exist in those types of contracts.
Then on the execution process, the fact that we are doing work that is so important and so high-end, we have to have the discipline on execution that ensures that the outcome is right. I mean, you think about some of the things we do on rocket development and, or on UAVs or wherever it is, and how important that is. We have unbelievable discipline on execution, so the practices we follow ensure that our fixed price and our T&M contracts are executed at the same level of performance delivery that our cost plus is. So I think we have a history of delivering fixed price and T&M. I don't know if there's numbers that, Travis, that would back that up. I mean, I just think it goes the fact that we're always consistent in our delivery of our financials.
Got it. And just maybe one quick follow-up. If you can talk about kind of your experience at Travis , at CACI, and then, John, if you can talk about kind of how you think about, you know, your experience at Harris going way back when. And I think we go back to, like, the Jacobs KeyW thesis. There was a lot of kind of thought about smart infrastructure, cybersecurity, cyber spectrum security. So maybe if you can talk about how the team thinks about integrating your experience around spectrum and how that kind of impacts your cyber portfolio. Thank you.
Well, yeah, I'll start. I mentioned that, you know, I've been fortunate to be part of many of our industry peers today, even before CACI with Leidos, when the IS&GS transaction occurred. But all those companies are companies we have really high respect for, and that, you know, I personally have been able to take a lot of lessons learned from those companies, not only from kinda the finance side of the equation, but also bringing companies together and being strategic about M&A. And then on the more tactical side, you know, really how to bring the best out of two organizations as you bring them together from an integration perspective. So, you know, really proud and, you know, grateful for those opportunities they provided me, and I'm looking forward to working with this team to deliver similar results for the new Amentum.
I think hopefully I make sure I hit this question, and please tell me if I don't. But when we look at things like cybersecurity, digital engineering, AI, and I think Jill articulated this extremely well for us this morning, is that we see them as key enablers. They are part. They're a layer of our solution. I don't think you're gonna see Amentum kind of winning, you know, billion-dollar contracts in cyber or billion-dollar contract in digital engineering. What we will see is we're gonna win these enterprise contracts just like we have been. And as I articulated our delivery strategy, those technology capabilities, like cyber, are an element. They're a layer in that solution, which enables us to differentiate what we're delivering to the customer.
So we can go to the customer and say, "We have this capability built into the solution." There's a cyber layer, there's a digital engineering layer, there's an AI layer to our overall solution, so that when the customer evaluates it, they give us higher ratings for what we're offering them, and that we have these capabilities across our business, and that we're using them and layering them into what we're doing, and then we have the capability at the back end to deliver that. So I think that if there's a lesson that I've learned, is that a lot of technology is just a part of a overall enterprise solution.
I just wanna add something which kind of combines a couple of questions, that you mentioned KeyW. And when Jacobs acquired KeyW, we knew there were a lot of jewels in there that were atypical to what we had at Jacobs and required a different mindset on how to drive those to success, and they're still there, those jewels. I would say we struggled at Jacobs to successfully do that with CMS as part of Jacobs, which was focused on infrastructure and several other things. This pure play combination, coupled with what you heard today around leveraging technology across markets with a CTO that is gonna be focused on it, I'm really excited about KeyW and what's gonna happen. Later than we had hoped, but I think the new Amentum is gonna get the benefit of that.
Makes sense. Thank you.
Excellent, and do we have anyone, anyone else? I do have one from the audience, and it's around recompete rates and just if you could discuss, you know, what percentage of contracts do we normally win, and a sense of to get a better sense of revenue occurrence.
Travis, would you like to jump on that?
Yeah, great. One of the things that we're excited about is, I mentioned the strong foundation of backlog, you know, in fiscal year 2025, 84% of our revenue coming from existing programs. And I mentioned as we look forward, we do benefit from longer than kinda industry average contract durations.
... which is a really, you know, strong benefit to the financial profile of the new Amentum. And as we look out over kind of the FY 2024 to FY 2028 time horizon, each year, less than 10%-15% of our revenue is up for recompete. So, you know, from a stability perspective, we have great visibility. Feel really good about that. And then, you know, obviously from a win rate perspective, not something we kinda disclose exactly from a competitive perspective, but as we've looked at both sides of the organizations coming together, when you think about industry average win rates, this organization has done a great job of winning their fair share over the long term.
Thanks, Travis. Do we, Kristen?
Hey, one more from me. Once you get your leverage to below 3 times, where are you thinking about capital deployment and seeing how you're getting margin synergies, cost synergies from the combined entity? Is there appetite to grow bigger inorganically once the leverage is in the right place?
Sure. We are very focused, as both myself and Travis articulated, on that target of 3x over the first 24 months. But I do think there, there will be time for us to think about that next stage out in the future. I think our focus right now, as we look at the landscape and we look at our capabilities, is probably on value-added technology capabilities. You know, today, focus is on AI, digital engineering that Jill mentioned, cybersecurity, bolstering those capabilities so we can add that to our solutions. Two years from now, there might be a new area that has emerged that is really important in the marketplace, and that M&A could be an opportunity to enhance that.
But I think overall, our organic growth opportunity of bringing these two companies together is substantial that can drive real value for the next many years. I think if you just look back on Amentum and our experience in taking Amentum from $4 billion to this year, finishing over $8 billion, and doing some M&A to kind of jumpstart the market opportunity and what we've been able to accomplish just going back to 2022, where the combined pro forma entity bid about $10.5 billion, and we won about $5.25 billion. In 2024, through the first three quarters of 2024, we had already bid over $20 billion, and we're on track to more than double the amount that we were awarded in 2022.
So I think just looking at the organic capability of bringing the companies together, having all those advantages I talked about of scale, customer trust, capabilities, and leveraging that, gives us room to grow. Then, of course, we'll think once we get to that 3 times, we'll think about the next steps then.
Here we go. Of course.
Yeah, Peter Arment with Baird. Thanks for all the great information today. It was super helpful. You talked about some of these very large TAMs, and your ability to kinda now maybe pursue larger IDIQ kind of bids and go after that. Is there certain areas that you would really highlight that you see that makes it the new Amentum is kind of a no-brainer that you should be able to pursue? Just-
Yeah.
Maybe we can start there.
Steve?
Thanks for the question. There are a few areas we're very excited about. I'm gonna start with one that didn't necessarily get top billing as one of the five core markets, but within what we call the civilian market, we would include commercial. And that's not government IDIQ, but I just wanna mention it quickly because developing and delivering solutions in the commercial market takes on an IDIQ-like quality. You don't have the same, you know, protracted government procurement acquisition.
It's about really being able to meet a need with a solution, and we today actually have some really nice work happening in that sector that we believe solutions that are, in many cases, replicable across automotive, across telecom, across some other commercial sectors, even getting into kind of the next-generation technology required in data centers to enable this huge uptick in computational intensity associated with AI. So we do believe there's gonna be some opportunities, nice opportunities in commercial space, that are certainly margin accretive to the business that we can bring. But to quickly answer your question around IDIQ, combined, we have, as we highlighted in the presentation, this unsurpassed portfolio of IDIQ vehicles. Now that we've really gotten a handle on kind of the combined solution capability, there's definitely runway for growth there.
I think if you look in the intelligence market, looking across some of the defense market, there is really nice opportunities for some of the solutions. So that absolutely will be a growth focus for us to be able to take advantage of those. And we like it because they tend to be those opportunities versus the big enterprise, they tend to be a little bit more technology-forward, and they tend to represent margin opportunities as well. So we're really excited about what we can do in IDIQ space.
Great. And then just a quick one, Travis, on free cash flow conversion. Your—I think your guidance is said 96% at the midpoint, and you look at the pro forma as the last few years, it's been around that level or right, right around 97% or something. But you talked about a 10% CAGR or plus. So can we consider, you know, that, you know, the model or the outlook looks like you're gonna be over 100% conversion, you know, in the future, or at least, is that a reasonable assumption?
Yeah. Thanks, thanks for the question. Yeah, there's different ways to define free cash flow conversion, so I'll just start off by stating that the way we've been defining it, obviously, we don't have kind of adjusted net income metrics out there just yet, but we will. And we've been defining free cash flow conversion as EBITDA minus CapEx divided by EBITDA, and we do expect our capital expenditures to remain at that kind of 0.3% of revenue for the foreseeable future due to the nature of the business that we talked about today. And then over the long term, once we get an EBITDA metric out there, or, not an EBITDA, a net income metric out there, sorry, we'll kind of flip it and then define it in more of a traditional way with adjusted net income.
Perfect. Thanks.
Yep.
All right. Yep. Bert, okay. Bert Subin from Stifel. Thanks for the question. Can you just help us understand the sort of the growth equation for the company better? It looks like in 2025 on track for a little less than 2%, 3% if you back out the SITEC contract. But John, you just mentioned that your pipeline is growing expansively. You have booked a lot more awards in 2024 than in 2023. And Steve, if we go back to the CMS days, you know, we're sort of looking at 6%-9% growth was always the target there, at least for the last couple of years.
So how do you get to, you know, 3%-5% or 4% growth when you had CMS more in the mid to high, and you're talking about the pipeline going up quite a bit from here?
Yeah, thanks for the question. I think you kinda teed it up nicely in that, you know, over the recent past, on an underlying basis, we look kind of mid-single digits organic growth is where the business has been at on both sides, right? And as we look at FY 2025, I mentioned a few dynamics, right? The first, obviously, is there's the SITEC impact from the legacy CMS side, and I mentioned two other things: the impact of cost synergies. Obviously, they have a negative impact to revenue on our cost-reimbursable contracts, as well as, you know, while we don't have a lot of overlap, as a company coming together, there is some minor pipeline overlap.
So I would think about it as, you know, we're being prudent and conservative about how we're thinking about the first year coming together, kind of as a transition year, right? And we feel really good about, as I said, you know, the sources of revenue, where they're gonna be coming from for FY 2025 and confident in our ability to deliver within the targeted ranges.
I think, Art, with as you look at 2025 and you see that number, but we also put a number out there from 2025 to 2028, which reflects, I think, you know, more aggressive outlook, and it gives kind of credit to the fact that we have that overlap in 2025 and that we should see that overlap go away, and then in the future years, we should see a higher growth rate. So, I think we've put the number out there that reflects that.
I do think one other thing to just quickly mention, and this with the legacy Jacobs business and, and we did publicize this in some of our earnings calls, a very large classified program that unfortunately got kinda stopped, put on a... not a performance issue, and in fact, we're already starting to see great opportunities to kinda reengage in that mission, but that created a little bit of a, in the short term, a little bit of a headwind as well.
I appreciate that, and just one follow-up. You know, how should we think about maybe the identity of Amentum? Like, if we look at the government services universe, I think some companies have gravitated more to the health side, some have gravitated to large-scale enterprise IT, others to mission hardware and software. You know, from the presentation today, it seems like there's sort of like a jack of all trades across lots of different businesses. Is there, like, a clear, sort of easy way to think about, you know, the capability you bring to different customers?
Well, I think we've been pretty clear on the idea that we see an identity that is built around engineering and technology, and we do think that that's a differentiator and that this is about a total solution mindset, the ability to design and build and integrate and then support. So having that technical expertise that's required to do prototyping allows you to then do the integration, allows you to do the support, so end-to-end service capability. But having both the engineering and the technology combined, I think provides an identity for all the employees and for us as a business. With our customer, they see us differently. They see us as capable at the front end, when you think of the acquisition lifecycle, R&D, and science, and then in design and integration down through to O&M.
Hi, John Barr with Needham Mutual Funds . Question is on counter-UAS and where you're focused. Is, from both, Class I to Class III, and then what technology, do you, have to bring to bear?
Great. Thanks, John. Jill?
You want me to take that one? Okay, happy to. Yeah, thanks for the question on counter-UAV technology. So on the Department of Homeland Security contract, where we highlighted today, we're doing evaluation of technologies across the spectrum of different classes, and even including underwater UAVs. So the scope is broad in terms of capabilities and expertise. We're also integrating some of the best technologies out there, not necessarily becoming, you know, limited to one particular technology system, but trying to pick the best of all. But I think we'll be gravitating towards being a system integrator and putting together our own capabilities. Right now, those are at the prototype stage and involve several different types of technologies, mostly in the radar area.
Great. Thanks.
You're welcome.
Great. We're gonna take one from, the folks who dialed in. So the question is, you know, is the 3 times leverage target, our, our long-term target, you know, given that it is, above, peers, is, is there any interest in, you know, possibly doing some sort of a transaction to, to delever from there?
Travis?
Yeah. Thank you for the question. I'd say we're absolutely focused on getting to that 3x net leverage target, just to kind of reiterate that again. And then once we get to that point, evaluating our options, right? Anything can happen in two years, and we're gonna be opportunistic in looking at the different opportunities that we have in front of us at that point in time, and it could mean continuing to pay down debt, right, to go to 2x. But I think what we'll do is we'll take a look at our various opportunities that we have in front of us at that point in time, and it could involve strategic M&A, it could involve the return of capital to shareholders or just continued investment in organic growth.
From a portfolio shaping perspective, as I mentioned on our kind of path to margin expansion, as you can imagine, coming together two large businesses is gonna be a $14 billion company with a really diverse set of capabilities. We'll be taking a look at our portfolio and making sure that we're focused in the right areas, and we'll be taking a look to see if there are any non-core assets that would be potential options for divestiture, but that'll be to come.
Do we have any other questions from the audience? All right. Well, thank you so much for coming out. I can't tell you how much we appreciate you making the trek. I know this is sort of an odd time of year to be coming out to a Capital Markets Day, a lot of vacations going on, so we really do appreciate your interest in Amentum, and look forward to speaking with you all in the future. Take care.
Thank you.
Thank you, everyone.
Thanks so much.