Jacobs Solutions Inc.

What they do

Jacobs provides end-to-end services spanning advisory and consulting, feasibility and planning, design, program delivery, and lifecycle management. The company operates through two segments: Infrastructure & Advanced Facilities (I&AF) and PA Consulting. I&AF serves clients in advanced manufacturing, cities & places, energy, environmental, life sciences, transportation, and water, while PA Consulting offers innovation and transformation consulting.

Revenue drivers

• Infrastructure & Advanced Facilities (I&AF) — Core segment generating the majority of revenue; Q3 2026 gross revenue grew 39% year-over-year, driven by data centers, semiconductors, energy & power, transportation, and water.
• PA Consulting — Acquired full ownership in March 2026; contributes to adjusted net revenue and adds high-end advisory and technology-enabled solutions, expanding the company's integrated offerings.

Recent performance

In Q3 2026 (ended June 26, 2026), Jacobs reported gross revenue of $4.08 billion, up 34.5% year-over-year, and adjusted net revenue of $2.4 billion, up 8.3%. GAAP net earnings were $137.4 million, reflecting a temporarily higher tax rate associated with the PA acquisition transaction, while adjusted EBITDA rose 16.7% to $366.8 million. Backlog reached a record $28.9 billion, up 27.3% year-over-year, with a trailing twelve-month book-to-bill ratio of 1.4x. The company generated $456 million in operating cash flow and repurchased $142 million of shares in the quarter.

Strategy

Under the 'Challenge Accepted' multi-year growth strategy launched in February 2025, Jacobs focuses on profitable growth across water and environmental, life sciences and advanced manufacturing, and critical infrastructure. The company completed full acquisition of PA Consulting in March 2026 to strengthen integrated advisory and technology-enabled solutions. Jacobs continues to invest in AI, data analytics, and digital platforms to help clients across the asset lifecycle. The company aims to deliver scalable full lifecycle solutions and leverage cross-cutting capabilities, particularly in the AI build-out for data centers and complex manufacturing facilities.

Risks

• Contract cost overruns — Fixed-price contracts may cause losses if costs exceed budgets or estimates, particularly on large infrastructure and advanced manufacturing projects.
• Contract cancellations or delays — Clients can adjust, cancel, or suspend contracts, making backlog an unreliable indicator of future revenue and earnings.
• Competition and market share — Highly competitive markets could reduce market share and negatively impact results if Jacobs fails to compete effectively.
• Economic and political conditions — Inflation, high interest rates, tariffs, and construction costs could dampen demand for services and affect project awards.

Outlook

For fiscal 2026, management raised guidance for the third consecutive quarter, expecting adjusted net revenue growth of 9.5% to 10.0% over fiscal 2025. Adjusted EBITDA margin is forecast at 14.7% to 14.8%, and adjusted EPS is projected at $7.20 to $7.30. Adjusted free cash flow margin is expected to be approximately 8%. Management expressed confidence in long-term trajectory and expects to reach or exceed FY29 targets.