Group 1: Company Performance - Jacobs reported a profit of $125.51 million for its fiscal first quarter 2026, compared to a loss of $18.13 million during the same period last year [9] - Revenue for the quarter reached $3.29 billion, reflecting a 12.3% increase from $2.93 billion a year ago [9] Group 2: Industry Trends - Construction demand for AI-related facilities is expected to continue growing, with a significant pipeline of work anticipated over the next 12 to 18 months across various markets, including the Middle East and Europe [2] - Pipeline growth in major verticals, such as life sciences and advanced manufacturing, increased by approximately 25%, while critical infrastructure work surged by more than 50% [2] Group 3: AI Integration - The company has doubled its AI efforts in development and consultancy, focusing on automating tasks and enhancing predictive analytics on-site [4] - The use of predictive analytics platforms like Acuity has been transformative, allowing the company to proactively address field-level issues in real time [5] Group 4: Project Focus - Key projects remain centered around data centers and semiconductor facilities, with owners often purchasing large electrical equipment directly while contracting Jacobs for integration [7] - There is also strong demand in the water sector, both domestically and internationally, with consistent gains in water-related construction bookings [8]

Core Insights - Jacobs Solutions Inc. reported strong first-quarter fiscal 2026 results, with adjusted earnings and revenues exceeding expectations and showing year-over-year growth [1][4] Financial Performance - Adjusted EPS was $1.53, surpassing the Zacks Consensus Estimate of $1.52 by 0.7%, and increased from $1.33 in the same quarter last year [4] - Gross revenues reached $3.29 billion, exceeding the consensus mark of $3.18 billion by 3.5% and growing 12.3% year over year [4] - Adjusted net revenues were $2.25 billion, up 8.2% year over year [4] - Adjusted operating profit grew 8.2% to $299.6 million, with an adjusted operating margin remaining flat at 13.3% [5] - Adjusted EBITDA was $302.6 million, up 7.3% year over year, with a margin of 13.4%, down 10 basis points from the previous year [5] Segment Performance - Infrastructure & Advanced Facilities segment revenues totaled $2.94 billion, a 12% increase year over year, with adjusted net revenues of $1.9 billion, up 6.9% [6] - PA Consulting segment generated $354.4 million in revenues, a 15.5% increase from the previous year [8] Backlog and Demand - Fiscal first-quarter backlog increased 20.6% year over year to $26.3 billion, indicating strong project wins and a book-to-bill ratio of 1.4x [5][9] - The backlog at the end of the quarter was $25.9 billion, up from $21.48 billion a year ago [7] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of the quarter were $1.55 billion, up from $1.24 billion at the end of fiscal 2025 [11] - Net cash provided by operating activities totaled $380.8 million, significantly up from $107.5 million in the same period last year [12] - Free cash flow was $364.9 million, up from $97.1 million a year ago [12] Future Outlook - Jacobs raised its fiscal 2026 guidance, expecting adjusted net revenues to grow between 6.5% and 10% and adjusted EPS to be between $6.95 and $7.30 [13] - The company anticipates a free cash flow margin ranging from 7% to 8.5% [14]

Core Insights - Jacobs has been selected to lead the engineering design for a significant coastal storm surge barrier system known as The Gate, part of the Coastal Texas Project, aimed at enhancing resilience against hurricanes and rising sea levels [1][2][3] Project Overview - The Bolivar Roads Gate System will span across Bolivar Roads, providing essential protection for over six million residents and safeguarding approximately $800 billion in regional assets [2][3] - The project is a collaboration between the Gulf Coast Protection District, the U.S. Army Corps of Engineers, and the Texas General Land Office, supported by nearly $1 billion in state funding, marking it as the most ambitious coastal resiliency effort in U.S. history [3] Benefits and Impact - The storm surge barrier is expected to lower recovery costs from storm damage, protect jobs linked to the region's port and industrial activities, and preserve sensitive ecosystems such as wetlands and oyster reefs [4] - Jacobs anticipates that the project will integrate advanced sector gates to manage storm surges while allowing maritime traffic, utilizing cutting-edge digital modeling for long-term operational reliability [3][4] Company Profile - Jacobs operates with approximately $12 billion in annual revenue and a workforce of nearly 43,000, providing comprehensive services across various sectors including energy, environmental, and transportation [6]

Core Viewpoint - Jacobs Solutions reported quarterly earnings of $1.53 per share, exceeding the Zacks Consensus Estimate of $1.52 per share, and showing an increase from $1.33 per share a year ago, indicating a positive earnings surprise of +0.99% [1] Financial Performance - The company achieved revenues of $3.29 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 3.51%, and up from $2.93 billion in the same quarter last year [2] - Over the last four quarters, Jacobs Solutions has consistently surpassed consensus EPS estimates four times and topped revenue estimates two times [2] Stock Performance - Jacobs Solutions shares have increased by approximately 3.3% since the beginning of the year, outperforming the S&P 500, which gained 1.9% [3] Future Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $1.72 on revenues of $3.23 billion, and for the current fiscal year, it is $7.06 on revenues of $12.95 billion [7] Industry Context - The Building Products - Miscellaneous industry, to which Jacobs Solutions belongs, is currently ranked in the bottom 27% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Data and Key Metrics Changes - Adjusted EPS grew 15% to $1.53, supported by robust 8% net revenue growth and solid underlying margin performance [4][11] - Gross revenue increased 12% year-over-year, and adjusted net revenue grew by more than 8% [10] - Consolidated backlog was up 21% year-over-year to a record $26.3 billion, with trailing 12-month book-to-bill rising to 1.4x [11][12] - Free cash flow for Q1 was $365 million, supported by solid working capital performance [15] Business Line Data and Key Metrics Changes - Life sciences and advanced manufacturing net revenue grew 10% in Q1, driven by strong award activity in data centers and semiconductor sectors [12][13] - Critical infrastructure net revenue increased 8% over Q1 2025, with robust growth in transportation, particularly in rail and aviation [13] - Water and environmental net revenue growth increased sequentially to 4%, driven by high single-digit growth in water [13][14] Market Data and Key Metrics Changes - International business grew over 9% year-over-year, with broad-based growth in Europe, the Middle East, and APAC [23] - The company expects environmental services performance to improve as it moves into the second half of the fiscal year [14][28] Company Strategy and Development Direction - The acquisition of the remaining stake in PA Consulting is seen as a key accelerant in the strategy to redefine the asset life cycle [4][10] - The company aims to simplify its structure and produce predictable, high-quality earnings over the long term [10] - Focus on leveraging digital consulting, innovation, and AI advisory to enhance service offerings [4][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the updated guidance due to strong performance and backlog growth, indicating a positive outlook for FY 2026 [4][17] - The company anticipates that the acquisition of PA Consulting will be accretive to adjusted EPS in the first 12 months following closing [18] - Management noted that the velocity of private sector work and strong demand in key markets are driving confidence in achieving higher revenue growth [23][24] Other Important Information - The company announced a quarterly dividend increase from $0.32 to $0.36 per share, a 12.5% increase [16] - The net leverage ratio currently stands just below 0.8x on LTM adjusted EBITDA, well below the target range of 1.0x-1.5x [16] Q&A Session Questions and Answers Question: Outlook considering potential government shutdown and macroeconomic factors - Management indicated that the velocity of backlog and strong wins in life sciences and advanced manufacturing are key drivers for revenue guidance, with confidence stemming from international business growth [23][24] Question: Environmental services performance and demand drivers - Management identified three key factors driving improvement: larger government programs, transition of disaster relief work to state and local levels, and increased private sector demand [26][28] Question: Backlog growth and project complexity - Management confirmed that the risk profile remains unchanged, utilizing the same EPCM delivery model as in the past [79] Question: PA Consulting acquisition and capital deployment - Management clarified the accounting and economic ownership differences related to the acquisition, emphasizing expected accretive earnings and synergies [82][85] Question: Project pipeline and AI impact - Management highlighted strong pipeline growth across core markets, with AI enabling faster project delivery and improved client outcomes [90][94]

Financial Data and Key Metrics Changes - Adjusted EPS grew 15% to $1.53, supported by robust 8% net revenue growth and solid underlying margin performance [4][11] - Gross revenue increased 12% year-over-year, and adjusted net revenue grew by more than 8% [10] - Consolidated backlog was up 21% year-over-year to a record $26.3 billion, with trailing 12-month book-to-bill rising to 1.4x [11][12] - Free cash flow for Q1 was $365 million, with a strong underlying performance despite a favorable cash timing item [15][16] Business Line Data and Key Metrics Changes - Life sciences and advanced manufacturing net revenue grew 10% in Q1, driven by strong award activity in data centers and semiconductor sectors [12][13] - Critical infrastructure net revenue increased 8% over Q1 2025, with robust growth in transportation, particularly in rail and aviation [13] - Water and environmental net revenue growth increased sequentially to 4%, driven by high single-digit growth in water [13][14] Market Data and Key Metrics Changes - International business grew over 9%, with broad-based growth in Europe, the Middle East, and APAC [23] - The company is seeing a strong demand for integrated consulting and delivery approaches, particularly in critical infrastructure [9] Company Strategy and Development Direction - The acquisition of the remaining stake in PA Consulting is seen as a key accelerant in the strategy to redefine the asset life cycle [4][10] - The company aims to simplify its structure and produce predictable, high-quality earnings over the long term [10] - Focus on leveraging digital consulting, innovation, and AI advisory to enhance service offerings and drive growth [4][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the updated guidance, citing strong execution and secular growth tailwinds [20] - The company anticipates continued growth in the life sciences and advanced manufacturing sectors, particularly in the second half of the fiscal year [12][14] - Management noted that the government shutdown did not impact their performance, providing confidence in their revenue range [23][24] Other Important Information - The company announced a 12.5% increase in its quarterly dividend from $0.32 to $0.36 per share [16] - The net leverage ratio currently stands just below 0.8x on LTM adjusted EBITDA, well below the target range of 1.0x-1.5x [16] Q&A Session Summary Question: Outlook considering potential government shutdown - Management indicated that the backlog's burn profile and strong wins in life sciences and advanced manufacturing are key drivers for confidence in guidance [23][24] Question: Environmental services business performance - Management highlighted three factors driving improvement: government contracts, disaster relief work transitioning to state and local levels, and increased private sector demand [25][26][28][29] Question: Backlog growth and project complexity - Management confirmed that the risk profile remains unchanged and that they are utilizing the same risk management strategies as in previous years [78][79] Question: PA Consulting acquisition valuation - Management clarified the accounting and economic ownership differences and emphasized the expected accretive nature of the acquisition [81][84] Question: Project pipeline growth by end markets - Management reported strong pipeline growth across water and environmental, life sciences, and critical infrastructure sectors, with varying growth rates [90]

Financial Data and Key Metrics Changes - Adjusted EPS grew 15% to $1.53, supported by robust 8% net revenue growth and solid underlying margin performance [4][11] - Gross revenue increased 12% year-over-year, and adjusted net revenue grew by more than 8% [10] - Consolidated backlog was up 21% year-over-year to a record $26.3 billion, with trailing 12-month book-to-bill rising to 1.4 times [11][12] - Free cash flow for Q1 was $365 million, with a strong working capital performance [15] Business Line Data and Key Metrics Changes - Life sciences and advanced manufacturing net revenue grew 10% in Q1, driven by strong award activity in data centers and semiconductor sectors [12][13] - Critical infrastructure net revenue increased 8% over Q1 2025, with robust growth in transportation, particularly in rail and aviation [13] - Water and environmental net revenue growth increased sequentially to 4%, driven by high single-digit growth in water [13][14] Market Data and Key Metrics Changes - International business grew over 9% year-over-year, with broad-based growth in Europe, the Middle East, and APAC [23] - The company expects environmental services performance to improve as larger programs from the US Department of Defense come through [27] Company Strategy and Development Direction - The company announced an agreement to acquire the remaining stake in PA Consulting, viewing it as a key accelerant in redefining the asset life cycle [4][10] - The focus remains on strong execution, profitable growth, and continued capital returns, with an increased outlook for net revenue, adjusted EPS, and free cash flow margin [5][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the revenue guidance, citing strong private sector work and a robust backlog [24] - The company anticipates that the acquisition of PA Consulting will be accretive to adjusted EPS in the first 12 months following closing [18] - Management noted that AI and digital enablement are driving efficiencies and growth in both top line and bottom line [72] Other Important Information - The company raised its quarterly dividend from $0.32 to $0.36 a share, marking a 12.5% increase [16] - The net leverage ratio currently stands just below 0.8x on LTM adjusted EBITDA, well below the target range [16] Q&A Session All Questions and Answers Question: Outlook considering government shutdown concerns - Management indicated that the backlog's burn profile and strong wins in life sciences and advanced manufacturing are driving confidence in the revenue range [23][24] Question: Environmental services business recovery - Management identified three drivers for recovery: larger programs from the US Department of Defense, transfer of disaster relief work to state and local levels, and increased private sector demand [27][28] Question: Backlog growth and project complexity - Management confirmed that the risk profile remains unchanged and that they are utilizing the same EPCM delivery model as in the past [81] Question: PA Consulting acquisition valuation - Management clarified the accounting and economic ownership differences and emphasized the expected accretive nature of the acquisition [82][86] Question: Project pipeline growth by core end markets - Management reported double-digit pipeline growth in water and environmental, and life sciences and advanced manufacturing, with high single digits in critical infrastructure [92]

Jacobs Fiscal 2026 First Quarter Results February 3, 2026 DISCLAIMER Forward-Looking Statement Disclaimer Certain statements contained in this presentation constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," " ...

Strategic Transformation and Growth - Jacobs reported a strategic transformation into a science-based consulting and advisory leader, focusing on digitally enabled solutions for sustainability and critical infrastructure challenges [169]. - The company launched a multi-year growth strategy called "Challenge Accepted" in February 2025, aimed at driving profitable growth and delivering scalable solutions across various sectors [170]. - Jacobs aims to leverage its data and digital capabilities to improve client operations and decision-making across the entire asset lifecycle [173]. - The company emphasizes the importance of addressing global challenges such as urbanization and infrastructure modernization through its integrated delivery model [171]. Financial Performance - Revenues for the first fiscal quarter of 2026 were $3.29 billion, an increase of $360.3 million, or 12.3%, from $2.93 billion for the corresponding period last year [192]. - Gross profit for the first fiscal quarter of 2026 was $765.3 million, an increase of $44.0 million, or 6.1%, from $721.3 million for the corresponding period last year, with gross profit margins of 23.2% and 24.6% respectively [193]. - Net earnings attributable to the Company from continuing operations for the first fiscal quarter of 2026 were $125.0 million, or $1.11 per diluted share, an increase of $142.1 million from a net loss of $(17.1) million for the corresponding period last year [189]. - Selling, general and administrative expenses for the three months ended December 26, 2025 were $532.7 million, an increase of $19.8 million, or 3.9%, from $512.8 million for the corresponding period last year [195]. - Net interest expense for the three months ended December 26, 2025 was $26.6 million, an increase of $1.5 million, or 5.8%, from $25.2 million for the corresponding periods last year [196]. - Miscellaneous income, net for the three months ended December 26, 2025 was $0.3 million, an increase of $130.4 million compared to a net expense of $(130.1) million for the corresponding period last year [197]. Segment Performance - Segment operating profit for Infrastructure & Advanced Facilities was $214.7 million, while PA Consulting reported $84.9 million, contributing to a total segment operating profit of $299.6 million [204]. - Revenues for the Infrastructure & Advanced Facilities (I&AF) segment for the three months ended December 26, 2025 were $2.9 billion, an increase of $312.6 million, or 12%, compared to $2.6 billion for the same period last year [209]. - Operating profit for the I&AF segment for the three months ended December 26, 2025 was $214.7 million, an increase of $4.5 million, or 2%, from $210.3 million for the same period last year [210]. - Revenues for the PA Consulting segment for the three months ended December 26, 2025 were $354.4 million, reflecting an increase of $47.7 million, or 16% from $306.7 million in the same period last year [212]. - Operating profit for the PA Consulting segment for the three months ended December 26, 2025 was $84.9 million, an increase of $18.2 million, or 27% from $66.7 million in the same period last year [213]. Cash Flow and Debt - Cash and cash equivalents at December 26, 2025 were $1.55 billion, an increase of $317.5 million from $1.24 billion at September 26, 2025 [222]. - Net cash provided by operating activities for the three months ended December 26, 2025 was $380.8 million, favorable by $273.3 million compared to $107.5 million in the same period last year [222]. - Net cash used for investing activities during the three months ended December 26, 2025 was $15.5 million, compared to $7.9 million in the same period last year due to higher levels of additions to property and equipment [223]. - Long-term debt as of December 26, 2025 increased by $249.6 million compared to September 26, 2025, primarily due to an increased draw on the revolving credit facility [227]. - Jacobs had $1.39 billion in outstanding borrowings under its Revolving Credit Facility and 2025 Term Loan Facility as of December 26, 2025 [243]. - Jacobs is in compliance with all debt covenants as of December 26, 2025 [236]. Acquisitions and Strategic Partnerships - The company completed a Reverse Morris Trust transaction on September 27, 2024, separating its Critical Mission Solutions and Cyber & Intelligence businesses into an independent public company named Amentum [182]. - The strategic partnership with PA Consulting enhances Jacobs' high-end advisory services, enabling integrated support across the full project lifecycle [174]. - The Company will acquire PA Consulting for an aggregate initial consideration of approximately £1.216 billion, with the transaction expected to close in the second quarter of fiscal 2026 [191]. - Jacobs will acquire PA Consulting for an initial consideration of approximately £1.216 billion, with 80% paid in cash and 20% in Jacobs' shares [234][235]. - An additional £75 million will be paid in shares or cash on the second anniversary of the transaction's closing [234]. Backlog and Future Outlook - Total backlog at December 26, 2025 was $26.3 billion, an increase from $21.8 billion at December 27, 2024, driven by growth in Advanced Manufacturing, Life Sciences, and Water markets [217]. - The PA Consulting Transaction is expected to close in the second quarter of fiscal 2026, pending regulatory approvals [234].

Financial Performance - Q1 2026 gross revenue reached $3.3 billion, reflecting a 12.3% year-over-year growth; adjusted net revenue was $2.3 billion, up 8.2% year-over-year[7] - GAAP net earnings for Q1 2026 were $125.0 million, compared to a net loss of $17.1 million in Q1 2025; adjusted EBITDA increased 7.3% year-over-year to $302.6 million[7] - For the three months ended December 26, 2025, total revenues from external customers reached $3,293,281, an increase from $2,932,956 for the same period in 2024, representing a growth of approximately 12.3%[16][17] - Adjusted net revenue for the three months ended December 26, 2025, was $2,252,628, compared to $2,082,497 for the same period in 2024, reflecting an increase of about 8.2%[16][17] - The company reported net earnings of $133,668 for the three months ended December 26, 2025, a significant recovery from a net loss of $5,003 in the same period of 2024[20] - Net earnings attributable to Jacobs from continuing operations for the three months ended December 26, 2025, were $124,954 thousand, compared to a loss of $17,129 thousand for the same period in 2024[47] - Basic net earnings per share from continuing operations for the three months ended December 26, 2025, was $1.12, compared to a loss of $0.10 for the same period in 2024[48] Backlog and Growth Metrics - The backlog grew to $26.3 billion, representing a 20.6% year-over-year increase, with a Q1 book-to-bill ratio of 2.0x[7] - The total backlog as of December 26, 2025, was $26,308 million, up from $21,815 million as of December 27, 2024, representing an increase of about 20.5%[21] - The Company reported a backlog representing expected revenue for work to be completed, which is a key operational metric for evaluating business performance[31] Strategic Initiatives - The company announced a strategic share repurchase of $252 million in Q1 and a 12.5% increase in its quarterly dividend[4] - The company is advancing its asset lifecycle strategy through the acquisition of the remaining stake in PA Consulting[4] Guidance and Projections - Fiscal 2026 adjusted net revenue is now expected to grow between 6.5% and 10.0%, up from the previous forecast of 6.0% to 10.0%[5] - Adjusted EPS guidance for FY 2026 has been raised to a range of $6.95 to $7.30, compared to the previous range of $6.90 to $7.30[5] - Jacobs' total free cash flow margin guidance for FY 2026 is now projected to be between 7.0% and 8.5%, up from the previous forecast of 7.0% to 8.0%[5] Tax and Financial Ratios - The effective tax rate from continuing operations improved to 35.5% in Q1 2026, down from 107.5% in Q1 2025[8] - The adjusted effective tax rate from Continuing Operations for the three months ended December 26, 2025, was 26.5%, slightly down from 27.5% for the same period in 2024[37] Cash Flow and Debt - Cash and cash equivalents at the end of the period increased to $1,553,904 from $1,300,441 at the end of December 27, 2024, marking a rise of approximately 19.5%[20] - Long-term debt increased to $2,486,022 as of December 26, 2025, compared to $2,236,456 as of September 26, 2025, reflecting an increase of approximately 11.1%[19] - The company reported a net cash provided by operating activities of $380,760 for the three months ended December 26, 2025, compared to $107,456 for the same period in 2024, indicating a substantial increase[20] Operational Metrics - Adjusted EBITDA for the Company is calculated by adding income tax expense, depreciation expense, and adjusted interest expense to adjusted net earnings, providing a clearer view of operational profitability[28] - The Company continues to monitor operational metrics such as the book-to-bill ratio to evaluate business trends and make strategic decisions[31] - Adjusted EBITDA for the three months ended December 26, 2025, was $302,584 thousand, with an adjusted EBITDA margin of 13.4%, compared to $282,114 thousand and a margin of 13.5% for the same period in 2024[47]