Jacobs Solutions Inc. Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Performance Overview

  • Backlog increased 6 percent year-over-year on a pro forma basis, reflecting strong demand across business lines.
  • Adjusted EBITDA (pro forma for KeyW) rose 25 percent compared to the prior year’s Q1.
  • Adjusted EPS grew 35 percent year-over-year when excluding a $0.06 discrete tax charge.
  • Free cash flow was in line with company expectations, with significantly stronger cash flow anticipated over the remaining fiscal quarters as restructuring winds down.
  • Gross revenue increased 9 percent year-over-year; net revenue rose 5 percent, driven by 7 percent People & Places Solutions growth and 3 percent growth within Critical Mission Solutions.
  • Adjusted gross margin expanded by 50 basis points due to lower benefit costs.
  • Adjusted operating profit increased 28 percent to $237 million.
  • Adjusted operating margin rose 120 basis points to 8.9 percent.
  • Adjusted EBITDA reached $260 million, nearly 10 percent of net revenue, up 150 basis points year-over-year.

Capital Deployment and Balance Sheet

  • New $1 billion share repurchase authorization added, bringing total authorization to $1.4 billion (approximately 10 percent of market cap).

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Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Jacobs Fiscal First Quarter 2020 Earnings Conference Call and Webcast. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Jonathan Doros. Thank you. Please go ahead. Jonathan Doros: Good morning and afternoon to all. Our earnings announcement was filed this morning. We have posted a copy of this slide presentation to our website, which we will reference in our prepared remarks. I'd like to refer you to our forward-looking statement disclaimer, which is summarized on Slide 3.Certain statements contained in this presentation constitute forward-looking statements, as such term is defined in Section 27A of the Securities Act of 1933, as amended; and Section 21E of the Securities and Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Statements made in this presentation and an update on historical facts are forward-looking statements. Although such statements are based on management's current estimates and expectations and currently available competitive, financial and economic data, forward-looking statements are inherently uncertain. You should not place undue reliance on such statements as actual results may differ materially.We caution the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, p

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