Jacobs Solutions Q3 Earnings Call Highlights

Jacobs Solutions Q3 Earnings Call Highlights

Jacobs raised its fiscal 2026 outlook for the third consecutive quarter , targeting 9.5%–10% adjusted net revenue growth, a 14.7%–14.8% EBITDA margin and adjusted EPS of $7.20–$7.30. Third-quarter adjusted EPS rose about 14% to $1.84, while adjusted EBITDA increased 17% to $367 million.

Record backlog of $29 billion, up more than 27% year over year, supports expectations for continued growth into fiscal 2027. Strong demand came from advanced manufacturing, semiconductors and AI data-center infrastructure, with direct AI infrastructure reaching 11% of adjusted net revenue. Jacobs generated $541 million in third-quarter adjusted free cash flow and repurchased $614 million of shares through the quarter. Net leverage fell to 1.8%, reaching its below-2.0x target one quarter ahead of schedule.

Jacobs Solutions NYSE: J reported fiscal third-quarter 2026 results marked by organic revenue growth, margin expansion and a record backlog, prompting the company to raise its full-year outlook for the third consecutive quarter. Chair and CEO Bob Pragada said adjusted earnings per share increased approximately 14% year over year to $1.84, supported by more than 8% adjusted net revenue growth and more than 100 basis points of margin expansion. The company recorded its sixth consecutive quarter of double-digit adjusted EPS growth, he said.

Adjusted EBITDA rose 17% to $367 million, while adjusted EBITDA margin reached 15.2%, up 109 basis points from a year earlier, according to CFO Venk Nathamuni. Gross revenue increased more than 34%, while adjusted net revenue, excluding pass-through revenue, grew more than 8%.

Consolidated backlog rose more than 27% year over year to a record $29 billion. Jacobs reported trailing-12-month book-to-bill ratios of 1.4x on gross revenue and 1.2x on net revenue. Net revenue and gross profit in backlog increased 11% and 14%, respectively, from the prior year.

Pragada said the company sees “convergence of backlog growth and overall revenue growth” and expects another strong bookings performance in the fiscal fourth quarter. Nathamuni said the backlog position provides confidence that fiscal 2027 growth can at least align with the company’s previously stated long-term average, though he deferred specific fiscal 2027 guidance until the next earnings call.

For fiscal 2026, Jacobs raised its outlook for adjusted net revenue growth to 9.5% to 10%. The company narrowed its adjusted EBITDA margin forecast to 14.7% to 14.8% and increased its adjusted EPS outlook to $7.20 to $7.30. The midpoint of the EPS range implies nearly 19% year-over-year adjusted EPS growth, Nathamuni said.

For the fourth quarter, Jacobs expects approximately 14% year-over-year net revenue growth, adjusted EBITDA margin of about 16%, a tax rate near 27.5%, and approximately $150 million in free cash flow.

Infrastructure & Advanced Facilities, or I&AF, generated nearly $2.1 billion in net revenue, a quarterly record for the segment. Segment operating profit increased 14% on 10% net revenue growth. Within I&AF, life sciences and advanced manufacturing net revenue climbed 24% year over year, the company’s highest reported growth rate in that end market since it began disclosing end-market results in late 2024. Data center and semiconductor activity were major contributors, and Jacobs expects the trend to continue in the fourth quarter. Direct AI infrastructure bu...