Revenue and Contract Balances

12 Months Ended

Sep. 28, 2025

Revenue from Contract with Customer [Abstract]

Revenue and Contract Balances

Revenue and Contract Balances

We recognize revenue over time as the related performance obligation is satisfied by transferring control of a promised good or service to our customers. Progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure includes forecasts based on the best information available and reflects our judgment to faithfully depict the value of the services transferred to the customer. For certain on-call engineering or consulting and similar contracts, we recognize revenue in the amount which we have the right to invoice the customer if that amount corresponds directly with the value of our performance completed to date.

Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near term. For those performance obligations for which revenue is recognized using a cost-to-cost measure of progress method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident.

Disaggregation of Revenue

We disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. The following tables present revenue disaggregated by client sector and contract type (in thousands):

	Fiscal Year Ended
	September 28, 2025		September 29, 2024		October 1, 2023
Client Sector:
U.S. federal government (1)	$	1,718,831	$	1,675,996	$	1,387,101
U.S. state and local government	789,968		613,185		607,074
U.S. commercial	899,298		909,642		869,460
International (2)	2,034,493		1,999,856		1,658,915
Total	$	5,442,590	$	5,198,679	$	4,522,550
Contract Type:
Fixed-price	$	2,365,680	$	2,016,638	$	1,643,849
Time-and-materials	2,319,766		2,337,913		2,166,671
Cost-plus	757,144		844,128		712,030
Total	$	5,442,590	$	5,198,679	$	4,522,550

(1) Includes revenue generated under U.S. federal government contracts performed outside the United States.

(2) Includes revenue generated from non-U.S. clients, primarily in Australia, Canada and the United Kingdom.

Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for fiscal 2025, 2024 and 2023.

Contract Assets and Contract Liabilities

We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance.

Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time-and-materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year.

Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets for the periods presented. Net contract assets/liabilities consisted of the following (in thousands):

	Fiscal Year Ended
	September 28, 2025		September 29, 2024
Contract assets (1)	$	138,232	$	129,678
Contract liabilities	(420,254)		(351,738)
Contract liabilities - non-current (2)	(2,628)		—
Net contract liabilities	$	(284,650)	$	(222,060)

(1) Includes $12.8 million and $7.9 million of contract retentions at fiscal 2025 and 2024 year-ends, respectively.

(2) Reported under "Other non-current liabilities" on our consolidated balance sheet as of September 28, 2025.

Both our contract assets and contract liabilities increased at fiscal 2025 year-end compared to fiscal 2024 year-end, due to the timing of our milestone billing on fixed-price contracts which were different from the timing of revenue recognition on those contracts. In fiscal 2025 and 2024, we recognized revenue of approximately $251 million and $247 million, respectively, from amounts included in the contract liability balances at the end of fiscal 2024 and 2023, respectively.

Revenue is recognized by measuring progress over time under ASC Topic 606, "Revenue from Contracts with Customers". We estimate and measure progress on our contracts over time whereby we compare our total costs incurred on each contract as a percentage of the total expected contract costs. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a result, in fiscal 2025, 2024 and 2023, we recognized net favorable revenue and operating income adjustments of $46.4 million, $29.8 million and $11.0 million, respectively.

Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings. As of September 28, 2025 and September 29, 2024, our consolidated balance sheets included liabilities for anticipated losses of $13.5 million and $15.1 million, respectively. The estimated cost to complete these related contracts at the end of fiscal 2025 and 2024 was approximately $78 million and $101 million, respectively.

Accounts Receivable, Net

Net accounts receivable consisted of the following (in thousands):

	Fiscal Year Ended
	September 28, 2025		September 29, 2024
Billed	$	855,026	$	707,406
Unbilled	310,818		348,907
Total accounts receivable	1,165,844		1,056,313
Allowance for doubtful accounts	(6,916)		(4,852)
Total accounts receivable, net	$	1,158,928	$	1,051,461

Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Substantially all of our unbilled receivables at fiscal 2025 year-end are expected to be billed and collected within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We estimate the allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as government agency or a commercial sector client; and general economic and industry conditions, which may affect our clients' ability to pay.

Other than the U.S. federal government, no single client accounted for more than 10% of our accounts receivable at fiscal 2025 and 2024 year-ends.

Remaining Unsatisfied Performance Obligation (“RUPO”)

Our RUPO represents a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $4.1 billion of RUPO as of September 28, 2025. Our RUPO increases with awards from new contracts or additions to existing contracts and decreases as work is performed and revenue is recognized on existing contracts. Our RUPO may also decrease when projects are canceled or modified in scope. We include a contract within our RUPO when the contract is awarded and an agreement on contract terms has been reached.

We expect to satisfy our RUPO as of fiscal 2025 year-end over the following periods (in thousands):

	Amount
Within 12 months	$	2,848,652
Beyond (1)	1,252,475
Total	$	4,101,127

(1) The majority of this amount is expected to be recognized over the subsequent two-year period.

Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. Our RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty; therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60 or 90 days).