Jacobs Raises Outlook as Revenue Growth Accelerates
Backlog reached a record $28.9 billion as orders strengthened.
Jacobs Solutions (J), the engineering and consulting-services provider, reported a 34.5% increase in fiscal third-quarter gross revenue as infrastructure work and higher pass-through revenue drove growth.
Gross revenue reached $4.08 billion, accelerating from year-over-year growth of 27.0% in the prior quarter and 12.3% two quarters earlier. Adjusted net revenue rose 8.3% to $2.42 billion, easing from 8.8% growth in the second quarter.
The gap reflected pass-through revenue, which increased roughly 21% sequentially to $1.66 billion. Adjusted earnings rose to $1.84 a share from $1.75 in the prior quarter and $1.53 two quarters earlier, though year-over-year growth slowed to 13.6% from 22.4%.
Adjusted earnings before interest, taxes, depreciation and amortization increased 16.7% to $366.8 million, accelerating from 14.2% growth in the second quarter. The adjusted EBITDA margin improved sequentially to about 15.2% of adjusted net revenue from about 14.1%.
Infrastructure & Advanced Facilities led the quarter, with gross revenue rising 39% and adjusted net revenue gaining 10%. Its operating margin widened to about 12.8% from 12.4% a year earlier. PA Consulting revenue declined about 1% to $329.5 million, reversing double-digit growth in each of the previous two quarters.
Backlog climbed from $27.0 billion in the second quarter, while quarterly book-to-bill rebounded to 1.5 times from 1.2 times. The trailing-12-month ratio held at 1.4 times, indicating that the stronger quarterly order pace had yet to lift the longer-term measure.
Jacobs now expects fiscal-2026 adjusted-net-revenue growth of 9.5% to 10.0%, compared with its previous range of 8.0% to 10.5%. Adjusted EPS guidance is $7.20 to $7.30 a share, up at the midpoint from the prior $7.10-to-$7.35 range, while adjusted EBITDA-margin guidance is 14.7% to 14.8%.
GAAP net earnings recovered to $137.4 million from a $43.0 million loss tied to PA acquisition-related items in the second quarter, though a temporarily elevated tax rate kept earnings below the year-earlier period. Jacobs generated $456 million of operating cash flow and reduced net leverage below its year-end target even as year-to-date share repurchases reached $614 million.