Jacobs Solutions Inc. Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Jacobs delivered a stronger-than-expected Q1, marking its fourth consecutive quarter of double‑digit adjusted EPS growth.
  • Adjusted EPS rose 15% year over year to $1.53, driven by 8% net revenue growth and stable margins.
  • Backlog increased 21% compared to Q1 2025, reaching a record $26.3 billion. Quarterly book‑to‑bill hit 2.0x, and trailing twelve‑month book‑to‑bill reached 1.4x.
  • The company announced an agreement to purchase the remaining stake in PA Consulting, positioning PA as a fully owned digital, AI, and innovation accelerator for Jacobs.

Financial Performance

  • Gross revenue increased 12% compared to Q1 2025; adjusted net revenue grew 8%.
  • Adjusted EBITDA grew 7% to $303 million with a 13.4% margin (versus a margin benefit last year due to lower PTO absorption).
  • Free cash flow reached $365 million. Adjusted for a one‑time timing benefit from a data center customer payment, underlying cash flow was still strong.
  • Net leverage stood below 0.8x LTM adjusted EBITDA (under the 1.0–1.5x target range); leverage expected to rise slightly above the range after the PA acquisition before normalizing within a year.
  • Quarterly dividend raised 12.5% to $0.36 per share.
  • Jacobs increased share repurchases in Q1 to capitalize on stock dislocation.

End Market Performance

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Operator: Ladies and gentlemen, thank you for standing by. My name is Crista, and I will be your conference operator today. At this time, I would like to welcome you to the Jacobs Solutions Inc. Fiscal First Quarter 2026 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star 1. Thank you. I would now like to turn the call over to Bert Subin, Vice President, Investor Relations. Bert? You may begin. Bert Subin: Thank you, Krista, and welcome, everyone. Following market close, we issued our earnings announcement, filed our Form 10-Q, and we have posted a slide presentation on our website we'll reference during the call. I would like to refer you to slide two of the presentation for information about our forward-looking statements, non-GAAP financial measures, and operating metrics. Now let's turn to the agenda on Slide three. Speaking on today's call will be Jacobs Solutions Inc.'s chair and CEO, Bob Pragada, and CFO, Venkatesh R. Nathamuni. Bob will begin by providing comments on the business, as well as highlights from our first quarter results and a recap of notable awards. Venk will then provide a detailed review of our financial performance, including commentary on end m

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