Jacobs Solutions (US:J)2026-02-03 21:13Strategic 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].