NASA insourcing push to cost Amentum 3% of revenue in 2027

NASA lost 22% of its civilian workforce in 2025, including scores of staffers assigned to science and space exploration programs. Now it is at work on an in-sourcing initiative focused on the employees who remain.

In February, NASA Administrator Jared Isaacman announced the agency’s plan to move more technical and operational work from contractors to civilian employees. Isaacman also said the agency will prioritize “rapid onboarding” of new civil servants.

Amentum’s franchise at NASA is emerging as one example of how that shift is affecting industry. During Amentum’s fiscal third quarter earnings call Tuesday, executives said the company is anticipating a 3% negative impact to revenue in its 2027 fiscal year that starts Oct. 1.

The company’s initial view in its second quarter financial report contemplated a 1% hit to the top line, but NASA has since further solidified its workforce plan and shared it with Amentum.

“NASA is taking this initiative to bolster the scientific engineering expertise as they think about a bigger mission set, more bold mission set into the future, programs like Moon to Mars and all of that,” Amentum’s chief operating officer Steve Arnette told analysts. “We've been able to sit with our NASA customer, center by center, individual contract by contract.”

Some of the remaining work on the affected contracts will transition to firm-fixed-price, a move that is in-line with the Trump administration’s April executive order on that method of contracting.

“We don't have all the contract actions in hand. Some contract (modifications) right now are in negotiation and progress, and NASA has actually moved out on beginning to hire employees,” Arnette added. “We're navigating the strategic reset that NASA is executing, knowing that a strong agency is good for the nation and world, and we expect there will be future growth opportunities.”

But while Amentum works to transition some work to its own NASA customer, the company is also touting two large wins as a sign of this franchise’s future prospects.

In the spring, an Amentum-Aerodyne Industries joint venture got the green light to proceed on a $1.8 billion contract called COSMOS that supports command-and-control vehicles for space vehicles.

Amentum has also secured the second iteration of NASA’s Center Maintenance, Operations and Engineering contract for broad engineering and professional services at Langley Research Center. Booked in the spring as well, CMOE II has a $973.8 million ceiling over up to 10 years.

As Arnette pointed out, many of Amentum’s larger contracts at NASA like those two remain in place. They also offer mechanisms that “allow NASA to mobilize Amentum as these big missions come to reality," Arnette said.

In addition to the NASA impacts, Amentum has also decided to exit a few domestic-based programs that carried low margins or essentially none at all for the company. These programs currently represent roughly 1% of Amentum’s revenue profile.

Arnette characterized that as “an intentional decision on where we’re prioritizing our resources for the highest-return opportunities.”

Fiscal third quarter revenue of $3.5 billion was down 2% from the prior year period, while profit of $290 million showed a 6% year-over-year increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

Amentum’s new fiscal year 2026 guidance pegs revenue in the range of $13.8 billion-to-$13.95 billion, down from the prior outlook of $13.95 billion-to-$14.3 billion. The company lifted its adjusted EBITDA margin guidance to a range of $1.115 billion-to-$1.14 billion, up from the prior $1.1 billion-to-$1.14 billion outlook.