v3.25.2
REVENUE
 6 Months Ended
Jun. 27, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE
REVENUE
Remaining Performance Obligations
Remaining performance obligations represent firm orders by the customer and exclude potential orders under indefinite delivery and indefinite quantity (IDIQ) contracts, unexercised contract options and contracts awarded to us that are being protested by competitors with the U.S. Government Accountability Office (GAO) or in the U.S. Court of Federal Claims (COFC) for which a stop work order has been received by the Company. The level of order activity related to programs can be affected by the timing of government funding authorizations and their project evaluation cycles. Year-over-year comparisons could, at times, be impacted by these factors, among others.
The Company's contracts are multi-year contracts and typically include an initial period of one year or less with annual one year (or less) option periods. The number of option periods varies by contract, and there is no guarantee that an option period will be exercised. The right to exercise an option period is at the sole discretion of the U.S. government when the Company is the prime contractor or of the prime contractor when the Company is a subcontractor. The Company expects to recognize a substantial portion of its performance obligations as revenue within the next 12 months. However, the U.S. government or the prime contractor may cancel any contract at any time through a termination for convenience or for cause. Substantially all the Company's contracts have terms that would permit recovery of all or a portion of the Company's incurred costs and fees for work performed in the event of a termination for convenience.
Remaining performance obligations are presented in the following table:
As of
June 27,December 31,
(In millions)20252024
Performance Obligations$3,901 $3,483 
As of June 27, 2025, the Company expects to recognize approximately 48% of the remaining performance obligations as revenue in 2025 and the majority of the remainder of the balance as revenue in 2026 and 2027.
Contract Estimates
The impact of adjustments in contract estimates on the Company's operating income can be reflected in either revenue or cost of revenue. Cumulative adjustments for the three months ended June 27, 2025 and June 28, 2024 increased operating income by $1.4 million and $0.7 million, respectively. Cumulative adjustments for the six months ended June 27, 2025 and June 28, 2024 increased operating income by $5.6 million and $1.2 million, respectively.
For the three and six months ended June 27, 2025, the net adjustments to operating income increased revenue by $4.9 million and $19.7 million, respectively. For the three and six months ended June 28, 2024, the net adjustments to operating income increased revenue by $6.0 million and $9.4 million, respectively.
Revenue by Category
Generally, the sales price elements for the Company's contracts are cost-plus, cost-reimbursable, firm-fixed-price and time-and-materials, all of which are commonly identified with a single contract. On a cost-plus contract, the Company is paid allowable incurred costs plus a profit, which can be fixed or variable depending on the contract’s fee arrangement, up to funding levels predetermined by the Company's customers.
On cost-plus contracts, the Company does not bear the risks of unexpected cost overruns, provided that incurred costs do not exceed the predetermined funded amounts. Most of the Company's cost-plus contracts also contain a firm-fixed-price element. Cost-plus contracts with award and incentive fee provisions are primarily variable contract fee arrangements. Award fees provide for a fee based on actual performance relative to contractually specified performance criteria. Incentive fees are based on the relationship between total allowable and target cost.
Most of the Company's contracts include a cost-reimbursable element to capture costs of consumable materials required for the program. Typically, these costs do not bear fees.
On a firm-fixed-price contract, the Company agrees to perform the contractual statement of work for a predetermined contract price. A firm-fixed-price contract typically offers higher profit margin potential than a cost-plus contract, which is commensurate with the greater levels of risk assumed on a firm-fixed-price contract. Although a firm-fixed-price contract generally permits retention of profits if the total actual contract costs are less than the estimated contract costs, the Company bears the risk that increased or unexpected costs may reduce profit or cause the Company to sustain losses on the contract. Although the overall scope of work required under the contract may not change, profit may be adjusted as experience is gained and as efficiencies are realized or costs are incurred.
On a time-and-materials contract, the Company is reimbursed for labor at fixed hourly rates and generally reimbursed separately for allowable materials, costs and expenses at cost. For this contract type, the Company bears the risk that labor costs and allocable indirect expenses are greater than the fixed hourly rate defined within the contract.
Revenue by contract type is as follows:
Three Months EndedSix Months Ended
June 27,June 28,%June 27,June 28,%
(In thousands)20252024Change20252024Change
Cost-plus and cost-reimbursable$647,582 $615,837 5.2 %$1,270,653 $1,200,659 5.8 %
Firm-fixed-price405,091 429,182 (5.6)%769,177 826,433 (6.9)%
Time-and-materials25,657 27,164 (5.5)%54,423 55,655 (2.2)%
Total revenue$1,078,330 $1,072,183 $2,094,253 $2,082,747 
Revenue by geographic region in which the contract is performed is as follows:
Three Months EndedSix Months Ended
June 27,June 28,%June 27,June 28,%
(In thousands)20252024Change20252024Change
United States$632,357 $578,881 9.2 %$1,209,815 $1,123,608 7.7 %
Middle East320,317 361,064 (11.3)%638,662 704,361 (9.3)%
Asia76,793 84,663 (9.3)%152,771 153,464 (0.5)%
Europe48,863 47,575 2.7 %93,005 101,314 (8.2)%
Total revenue$1,078,330 $1,072,183 $2,094,253 $2,082,747 
Revenue by contract relationship is as follows:
Three Months EndedSix Months Ended
June 27,June 28,%June 27,June 28,%
(In thousands)20252024Change20252024Change
Prime contractor$1,008,340 $1,006,121 0.2 %$1,972,086 $1,951,276 1.1 %
Subcontractor69,990 66,062 5.9 %122,167 131,471 (7.1)%
Total revenue$1,078,330 $1,072,183 $2,094,253 $2,082,747 
Revenue by customer is as follows:
Three Months EndedSix Months Ended
June 27,June 28,%June 27,June 28,%
(In thousands)20252024Change20252024Change
Army$457,443 $456,690 0.2 %$899,579 $890,120 1.1 %
Navy354,282 349,824 1.3 %700,394 671,208 4.3 %
Air Force107,822 127,467 (15.4)%206,948 246,036 (15.9)%
Other158,783 138,202 14.9 %287,332 275,383 4.3 %
Total revenue$1,078,330 $1,072,183 $2,094,253 $2,082,747 
Contract Balances
The timing of revenue recognition, billings, and cash collections results in billed and unbilled accounts receivable (contract assets) and customer advances and deposits (contract liabilities) on the Condensed Consolidated Balance Sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms at periodic intervals (e.g., biweekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, the Company may receive advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These advance billings and payments are not considered significant financing components because they are frequently intended to ensure that both parties are in conformance with the primary contract terms. These assets and liabilities are reported on the Condensed Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period.
As of January 1, 2024, the Company had contract assets of $561.9 million. As of June 27, 2025 and December 31, 2024, the Company had contract assets of $587.5 million and $620.5 million, respectively. Contract assets primarily consist of unbilled receivables which represent rights to consideration for work completed but not billed as of the reporting date. The balance of unbilled receivables consists of costs and fees that are: (i) billable immediately; (ii) billable on contract completion; or (iii) billable upon other specified events, such as the resolution of a request for equitable adjustment. Refer to Note 4, Receivables for additional information regarding the composition of the Company's receivable balances. As of January 1, 2024, the Company had contract liabilities of $109.6 million. As of June 27, 2025 and December 31, 2024, contract liabilities, included in other accrued liabilities in the Condensed Consolidated Balance Sheets, were $98.2 million and $98.7 million, respectively.