Jacobs Solutions Inc. Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Management: CEO Bob Pragada, Special Adviser (and former Interim CFO) Kevin Berryman, and new CFO Venk Nathamuni.
  • Quarter highlights included strong backlog growth, margin expansion, and successful progress on the planned separation and merger of the Critical Mission Solutions (CMS) and Cyber & Intelligence businesses with Amentum.
  • The transaction is now expected to close in the second half of September 2024.

Financial Performance (Compared to Q3 FY2023)

  • Adjusted EBITDA: $392 million, up 11%, with 11.5% margin.
  • Adjusted EPS: $1.96, up 11%.
  • Gross revenue: up 1%.
  • Adjusted net revenue: up 1%.
  • GAAP operating profit: $260 million.
  • Backlog: Up 6% year-over-year with revenue book-to-bill of 1.29x.
  • Free cash flow: $445 million for the quarter, with YTD conversion above 100% and full-year expected to exceed 100%.

Business Segment Highlights

People & Places Solutions (P&PS)
  • Adjusted net revenue up 5% year-over-year.
  • Adjusted operating profit up 12% year-over-year.
  • Adjusted operating margin of 15.3%, up 95 bps.
  • Backlog up 10% year-over-year with a record book-to-bill of 1.53x.

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Operator: Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Jacobs Solutions Third Quarter 2024 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. [Operator Instructions] Thank you. I will now turn the conference over to Ayan Banerjee, Senior Vice President of Investor Relations and Finance. Ayan, you may begin your conference. Ayan Banerjee: Thank you. Good morning. Our earnings announcement was filed this morning, and we have posted a slide presentation on our website, which we will refer during the call. I would like to refer you to Slide 2 of the presentation material for information about our forward-looking statements, non-GAAP financial measures and operating metrics. Turning to the agenda on Slide 3. Speaking on today's call will be Jacobs' CEO, Bob Pragada; Special Adviser to the CEO, Kevin Berryman; as well as our new CFO, Venk Nathamuni. Bob will begin by providing an overview of recent activities and then summarizing highlights from our third quarter results. Kevin will provide a more in-depth discussion of our financial metrics. Venk will then provide a review of our balance sheet and cash flow and provide comments around our guidance and Investor Day. Finally, Bob will provide closing remarks and then we will open up the call for your questi

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