Core Insights - Jacobs Solutions Inc. reported better-than-expected fourth-quarter earnings with gross revenue of $3.2 billion, a 6.6% increase year-over-year, and adjusted net revenue of $2.2 billion, up 5.8% [1] - Adjusted EPS for the quarter was $1.75, surpassing the estimate of $1.68, while revenue of $3.155 billion exceeded the $2.261 billion estimate [1] - The company provided fiscal 2026 guidance for adjusted EPS of $6.90 to $7.30, above the Wall Street estimate of $6.07, and expects adjusted net revenue of $9.217 billion to $9.564 billion, compared to the $8.989 billion estimate [2] Analyst Ratings and Price Targets - Baird analyst downgraded Jacobs from Outperform to Neutral, lowering the price target from $161 to $146 [5] - B of A Securities maintained a Neutral rating and cut the price target from $147 to $141 [5] - RBC Capital maintained an Outperform rating but reduced the price target from $157 to $156 [5] - Wells Fargo maintained an Equal-Weight rating and lowered the price target from $160 to $130 [5] - Truist Securities maintained a Hold rating and cut the price target from $163 to $152 [5]

Jacobs Solutions Inc. (NYSE:J) is quiet on Friday. That wasn't the case on Thursday as the stock dropped almost 11% after posting earnings.But it may have found a bottom. That's why our team of technical analysts has made it our Stock of the Day.Support levels are prices or narrow price ranges where a large number of shares are available to buy. If a stock or market is headed lower, it's because there isn't enough demand to absorb the supply.Sellers need to offer their shares at a discount, and this could f ...

Group 1 - Jacob Solutions is an engineering company involved in building various infrastructures, including data centers and facilities for drug companies, positioning itself as a key player in the reshoring and construction sector [1][2] - The company provided guidance for 2026 that was weaker than market expectations, which contributed to a sell-off in its stock and raised concerns about the overall health of the reshoring construction market [1][2] - There is a perception that the guidance downgrade may indicate a broader downturn in the reshoring sector, although this is deemed to be unfounded and not reflective of the actual market conditions [3][4] Group 2 - The timing of the guidance downgrade was criticized as being poorly executed, suggesting that it may have exacerbated market fears unnecessarily [4] - Commentary on the concept of a "super cycle" in the industry was mentioned, indicating skepticism about such labels and their implications for market trends [4]

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Core Insights - Jacobs Solutions Inc. reported stronger-than-expected fiscal fourth-quarter earnings with adjusted EPS of $1.75, exceeding the analyst forecast of $1.67 [1] - The company generated revenue of $3.2 billion for the quarter, surpassing consensus expectations of $3.15 billion, marking a 6.6% year-over-year increase [1] - Jacobs' backlog reached a record $23.1 billion, up 5.6% from the prior year, supported by a book-to-bill ratio of 1.1x [2] Financial Performance - Adjusted net revenue rose 5.8% to $2.2 billion [1] - Adjusted EPS increased 27.7% year over year, while adjusted EBITDA rose 12% to $324 million [2] - GAAP earnings were impacted by mark-to-market adjustments related to the company's former holdings in Amentum [2] Future Projections - For fiscal 2026, Jacobs projected adjusted EPS between $6.90 and $7.30, representing 16% growth at the midpoint compared to fiscal 2025 [3] - The midpoint of $7.10 was slightly above the analyst consensus of $7.01 [3] - The company anticipates adjusted net revenue growth of 6% to 10% for the year [3]

Core Insights - Jacobs Solutions Inc. reported strong fiscal fourth-quarter 2025 results, with earnings and revenues exceeding expectations, driven by broad-based strength across various sectors [1][2][8] - The company's share price increased by over 3.5% following the earnings announcement [1] Revenue & Earnings Performance - Fiscal Q4 2025 revenues reached $3.15 billion, a 6.6% year-over-year increase, slightly above the Zacks Consensus Estimate of $3.14 billion [2] - Adjusted net revenue rose 5.8% year-over-year to $2.24 billion, indicating healthy growth in core markets [2] - Adjusted EPS was $1.75, up 27.7% from $1.37 last year, surpassing the Zacks Consensus Estimate of $1.67 [3] Margin Improvement - Gross profit increased to $766.9 million from $735.1 million a year earlier [4] - Adjusted EBITDA grew 12% year-over-year to $324 million, with a margin expansion to 14.4% from 13.6% [4] - Adjusted operating profit rose to $326 million from $280.5 million, with an adjusted operating margin improvement to 14.5%, up 134 basis points year-over-year [4] Segment Performance - Infrastructure & Advanced Facilities (I&AF) generated $2.84 billion in revenues, a 6% increase from last year, with adjusted net revenues of $1.92 billion [5] - PA Consulting reported revenues of $318.5 million, a 10% year-over-year increase, with operating profit improving to $72 million [6] - Total company backlog reached a record $23.06 billion, up 5.6% year-over-year, with a healthy book-to-bill ratio of 1.1X [6] Financial Position - Jacobs ended Q4 with $1.24 billion in cash and cash equivalents, compared to $1.14 billion at the end of fiscal 2024 [7] - Long-term debt stood at $2.24 billion, with a net debt-to-EBITDA ratio of 0.8x, below the targeted range of 1.0–1.5x [7] Full-Year Highlights - For fiscal 2025, gross revenue rose 4.6% year-over-year to $12.0 billion, while adjusted net revenue increased 5.3% to $8.7 billion [10] - Adjusted EBITDA grew 13.9% year-over-year to $1.2 billion, yielding a margin improvement to 13.9% [10] - Adjusted EPS increased 15.9% year-over-year to $6.12, reflecting expanding operating leverage [10] Fiscal 2026 Outlook - Jacobs projects 6–10% adjusted net revenue growth for fiscal 2026, with an adjusted EBITDA margin of 14.4–14.7% and adjusted EPS of $6.90–$7.30 [11] - Management emphasized continued strength in secular growth markets and the benefits of a record backlog entering the new fiscal year [11]

Financial Data and Key Metrics Changes - The company reported a 28% year-over-year increase in Q4 adjusted EPS, driven by a 6% net revenue growth and a record adjusted EBITDA margin of over 14.4% [5][10] - For the full fiscal year 2025, adjusted EPS grew by 16%, supported by mid-single-digit net revenue growth and strong margin expansion [5][11] - The consolidated backlog increased by 6% year-over-year to a record $23.1 billion, with a trailing 12-month book-to-bill ratio of 1.1x [11][12] Business Line Data and Key Metrics Changes - In Q4, gross revenue increased by 7% year-over-year, while adjusted net revenue grew by 6% [10] - The Infrastructure and Advanced Facilities segment saw a 16% increase in operating profit year-over-year in Q4, with a 13% increase for the full fiscal year [16] - PA Consulting's revenue increased by 10% year-over-year in Q4, contributing to a 17% increase in operating profit [16] Market Data and Key Metrics Changes - Net revenue growth across the three end markets was consistent, with water and environmental and life sciences and advanced manufacturing growing just over 4%, and critical infrastructure at about 6% for fiscal year 2025 [12] - In Q4, net revenue in critical infrastructure increased by more than 9% year-on-year, driven by key programs in the transportation sector [13] - The water and environmental end market saw flat year-on-year revenue in Q4, with mixed demand trends [15] Company Strategy and Development Direction - The company aims to redefine the asset life cycle and expand its addressable market with core clients, particularly in the water sector, which remains a high-growth area [6][8] - The strategy includes leveraging AI and digital capabilities to enhance service delivery and operational efficiency [42][43] - The company is focused on maintaining a disciplined capital returns policy while investing in growth opportunities [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering FY 2026 with strong momentum, backed by a record backlog and expanding margins [21][19] - The company anticipates continued tailwinds in the transportation and energy sectors, with expectations for water to remain a key growth driver [14][15] - Management highlighted the importance of regulatory stability in the environmental sector for future growth [31] Other Important Information - Free cash flow generation for fiscal year 2025 was $607 million, with a return of approximately 150% of free cash flow to shareholders [17] - The company approved a $0.32 per share dividend, representing a 10% year-over-year growth [18] Q&A Session Summary Question: Impact of federal government shutdown on fiscal 2026 bookings - Management indicated that there was no impact from the federal government shutdown on fiscal 2025 bookings, as awards occurred before the shutdown [24] Question: Update on PA Consulting negotiations - Management confirmed that negotiations are progressing and a decision is expected before March 2026 [25] Question: Softness in environmental business - Management noted that regulatory volatility and a pause in spending from private sector clients contributed to the softness in the environmental sector [30][31] Question: Free cash flow guidance and unusual items - Management explained that the guidance includes a one-time tax event and cash expenses related to the PA Consulting combination [34] Question: Margin performance in infrastructure and advanced facilities - Management expects a sequential slowdown in Q1 margins but anticipates a linear progression throughout FY 2026 [40] Question: AI leverage and margin opportunities - Management highlighted ongoing AI initiatives and partnerships that are expected to contribute to margin expansion [42][43] Question: Regional performance across end markets - Management reported strong growth across all regions, with double-digit growth in the Middle East and recovery in Europe [49] Question: Pipeline outlook and conversion expectations - Management indicated that the fastest-growing pipelines are in data centers, semiconductors, and life sciences, with strong conversion expected in FY 2026 [67]

Financial Data and Key Metrics Changes - The company reported a 28% year-over-year increase in adjusted EPS for Q4, driven by a 6% net revenue growth and a record adjusted EBITDA margin of over 14.4% [6][12] - For the full fiscal year 2025, adjusted EPS grew by 16%, supported by mid-single-digit net revenue growth and strong margin expansion [6][12] - The consolidated backlog increased by 6% year-over-year to a record $23.1 billion, with a trailing 12-month book-to-bill ratio of 1.1 times [12][19] Business Line Data and Key Metrics Changes - Infrastructure and Advanced Facilities operating profit increased by 16% year-over-year in Q4, with a 13% increase for the full fiscal year [16][17] - PA Consulting's revenue grew by 10% year-over-year in Q4, contributing to a 17% increase in operating profit [17] - The water and environmental sector saw net revenue growth of just over 4% for the fiscal year, while critical infrastructure grew by about 6% [13][15] Market Data and Key Metrics Changes - In Q4, net revenue in critical infrastructure increased by more than 9% year-over-year, driven by key programs in the transportation sector [13][14] - The life sciences and advanced manufacturing sector experienced a net revenue growth of just over 5% in Q4, with strong growth in life sciences and data centers [15] - The water and environmental end market was roughly flat year-over-year in Q4, with mixed demand impacting performance [16] Company Strategy and Development Direction - The company aims to redefine the asset life cycle and expand its addressable market with core clients, particularly in the water sector, which remains a high-growth area [7][9] - The strategy includes leveraging AI and digital capabilities to enhance service delivery and operational efficiency [46][47] - The company is focused on maintaining a disciplined capital returns policy while investing in growth opportunities [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering FY26 with strong momentum, backed by a record backlog and healthy demand across sectors [21][20] - The company anticipates continued tailwinds in transportation and energy sectors, with expectations for water to remain a key growth driver [15][16] - Management highlighted the importance of regulatory stability in the environmental sector for future growth [32] Other Important Information - Free cash flow generation for fiscal year 2025 was $607 million, with a commitment to return approximately 150% of free cash flow to shareholders [18] - The company approved a $0.32 per share dividend, representing a 10% year-over-year growth [19] - The fiscal year 2026 outlook includes expectations for adjusted net revenue growth of 6%-10% and adjusted EPS growth of 16% year-over-year [19][20] Q&A Session Summary Question: Impact of federal government shutdown on fiscal 2026 bookings - Management indicated that there was no impact from the federal government shutdown on bookings, as awards occurred before the shutdown [24][25] Question: Update on PA Consulting negotiations - Management confirmed that negotiations are progressing and a decision is expected before March 2026 [26] Question: Softness in environmental business - Management noted that regulatory volatility and a pause in spending from private sector clients contributed to softness in the environmental sector [32][33] Question: Free cash flow guidance and unusual items - Management explained that the guidance includes a one-time tax event and cash expenses related to PA Consulting negotiations [36] Question: Margin performance in infrastructure and advanced facilities - Management expects a sequential slowdown in Q1 margins but anticipates a linear progression throughout FY26 [43] Question: Leveraging AI for margin opportunities - Management highlighted ongoing AI initiatives and partnerships that are expected to contribute to margin expansion [46][47] Question: Transportation funding visibility under IIJ - Management confirmed that transportation remains a catalyst for growth, with strong performance seen globally [52] Question: Regional performance across end markets - Management reported double-digit growth in the Middle East and recovery in Europe, with strong performance across all regions [53] Question: Bridging margin expansion between fiscal years - Management outlined several factors contributing to margin expansion, including global delivery and operational efficiencies [60][61] Question: Changes in data center assignments - Management noted increased interest in data center projects in the Middle East and Europe, with a fivefold increase in the pipeline [64][71]

Financial Data and Key Metrics Changes - The company reported a 28% year-over-year increase in adjusted EPS for Q4, driven by a 6% net revenue growth and a record adjusted EBITDA margin of over 14.4% [6][12] - For the full fiscal year 2025, adjusted EPS grew by 16%, supported by mid-single-digit net revenue growth and strong margin expansion [6][12] - The consolidated backlog increased by 6% year-over-year to a record $23.1 billion, with a trailing 12-month book-to-bill ratio of 1.1 times [12][18] Business Line Data and Key Metrics Changes - Infrastructure and Advanced Facilities operating profit increased by 16% year-over-year in Q4, with a 13% increase for the full fiscal year [16][17] - PA Consulting's revenue grew by 10% year-over-year in Q4, contributing to a 17% increase in operating profit [17] - The water and environmental sector saw flat revenue year-over-year in Q4, while critical infrastructure net revenue increased by over 9% [15][16] Market Data and Key Metrics Changes - Net revenue growth across the three end markets was consistent, with water and environmental and life sciences and advanced manufacturing growing just over 4%, and critical infrastructure at about 6% for fiscal year 2025 [14] - The company experienced strong growth in the transportation sector, particularly in the U.S. and internationally, with significant projects in New York and the U.K. [10][15] Company Strategy and Development Direction - The company aims to redefine the asset life cycle and expand its addressable market with core clients, particularly in the water sector, which remains a high-growth area [7][10] - The strategy includes leveraging AI and digital capabilities to enhance service delivery and operational efficiency [49][50] - The company is focused on maintaining a disciplined capital returns policy while investing in growth opportunities [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering fiscal year 2026 with strong momentum, backed by a record backlog and expanding margins [22][20] - The company anticipates continued tailwinds in the transportation and energy sectors, with expectations for water to remain a key growth driver [15][16] - Management noted that fiscal year 2026 will include an extra week in Q4, which is expected to positively impact revenue growth [19] Other Important Information - Free cash flow generation for fiscal year 2025 was $607 million, with a commitment to return approximately 150% of free cash flow to shareholders [18] - The company approved a $0.32 per share dividend, representing a 10% year-over-year increase [18] Q&A Session Summary Question: Impact of federal government shutdown on fiscal 2026 bookings - Management indicated that there was no impact from the federal government shutdown on fiscal 2025 bookings, as awards occurred before the shutdown [24][25] Question: Update on PA Consulting negotiations - Management confirmed that negotiations are progressing and a decision is expected before March 2026 [26] Question: Softness in environmental business - Management explained that regulatory volatility and a pause in spending from private sector clients contributed to the softness in the environmental sector [31][35] Question: Guidance on free cash flow - Management clarified that the guidance includes a one-time tax event and cash expenses related to the PA Consulting combination [39] Question: Margin performance in infrastructure and advanced facilities - Management noted that margins are expected to show a linear progression throughout fiscal year 2026, with Q1 being the slowest [46][48] Question: Transportation funding visibility under IIJ - Management confirmed that transportation remains a catalyst for growth, with strong performance seen globally [57] Question: Regional performance across end markets - Management reported double-digit growth in the Middle East and recovery in Europe, with strong performance across all regions [58][59] Question: Pipeline outlook and conversion - Management highlighted strong growth in the data center and semiconductor sectors, with a 5x increase in the data center pipeline [86][87]

For the quarter ended September 2025, Jacobs Solutions (J) reported revenue of $3.15 billion, up 6.6% over the same period last year. EPS came in at $1.75, compared to $1.37 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $3.14 billion, representing a surprise of +0.55%. The company delivered an EPS surprise of +4.79%, with the consensus EPS estimate being $1.67.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ho ...