J - Earnings call transcript Q3 2021 | Jacobs Engineering Group Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Jacobs’ Fiscal Third Quarter 2021 Earnings Conference Call and Webcast [Operator Instructions] I would now like to turn the call over to Jonathan Doros. Thank you. Please go ahead.

Jonathan Doros

Thank you. Good morning to all.

filed was announcement earnings this morning. Our have on our we call. posted reference a presentation slide this of website, the copy during And which will we

is the in potential would you forward-looking government including on programs, regarding expected others. forward-looking included continuing During I our like of our stimulus be to strategic financial these of statement to amongst investment effects pandemic, refer respect disclaimer, Consulting, X our the statements, other COVID-XX the benefits we'll presentation, PA to which with Slide forward-looking and in outlook, statements.

referring During this more presentation, certain measures. we'll X presentation be Please Slide refer for of figures. the to to financial these on information non-GAAP

pro on will for the addition, we forma comparisons the presentation, See a In discuss more these Slide calculation X metrics. current pro forma results of information of during basis. prior on periods

periods which current Wood Buffalo of forma Group, comparisons, March Nuclear For Consulting the XXXX. November investment which which PA and XXXX closed business, the closed pro the March in closed XXXX of in prior results and of the in and include

more review making and a against a sheet our of metrics, performance discussion by our agenda and on Kevin Jacobs. Steve then of of the strategy ESG line Chief Kevin cash CEO, review we progress will Officer, today's by and will future speaking and Demetriou; X, balance Jacobs' Officer, followed and provide in-depth Chair to Turning and call will Steve Pragada; Bob the our the updating Operating Bob Chief our business. will flow. President on Financial at President by be financial Slide begin Berryman. are

CEO. ESG for With pass our then and the some outlook Demetriou, we'll of solution. along to will further the it this related Steve detailed call Chair provide that, In remarks, information, including and I'll examples Finally, our ESG over questions. of additional Steve provides of leading appendix closing presentation open with a your updated now

Steve Demetriou

you fiscal for thank performance discuss third to quarter initiatives. right, joining our business XXXX key All year, today us and

third reiterate X, I'd portfolio before we includes profit to Slide growth to aligning results, double quarter our reviewing like secular sustained Turning deliver large digit commitment where to opportunities toward our growth. can current strategy, our which our

last Day our developing landscape. our new with review new As of along we completed financial and business look competitive quarter, later a mentioned strategy year. just I forward targets strategy this are our sharing to corporate updated, our and We Investor at multi-year midpoint

EBITDA increasing pleased National our excludes financial and year-over-year Labs our pro-forma up our strong adjusted XX%. on X% a Backlog remediation. with significant our ended third year-over-year the XX% with third Turning growth X% results, and basis. backlog net And to I'm of up revenues quarter performance Idaho quarter

would on third PA Consulting to backlog Now revenue that XX% the cleared award be performance including Jacobs’ a with protest, Idaho, total for when continued basis up post growth. up Idaho quarter XX% proforma and reported has X%. Total exceptional

one growing maintaining More importantly, profitable consultancy the and while growth this firms. most adjusted of of PA margins XX%, it making fastest EBITDA delivered

PA, including we again and fiscal outlook. XXXX EBITDA strong the year, are adjusted across Jacobs, EPS our year-to-date of performance increasing Given all full adjusted

in national supply Looking chain for super life period strong infrastructure most sciences. we growth our by an global beyond XXXX, potential and driven energy trends modernization, in global entering fiscal cycle semiconductors believe are Jacobs, attractive transition, and and we investments, security, notably a

both robust an for anticipating are XXXX. increasing XXXX pipeline fiscal sales We and and year,

solve challenges this technology-enabled our aligning knowledge our are to shareholders. investments and for our meaningful convert help to domain solutions pipeline We into and deep, clients’ growth culture, strong in opportunities

they and work an Reimagined sustainable for world right, stimulating world. and do launched more what values now we asking Perspectives, the higher we are company's connected, our is to solutions ways our high challenges. response. how promise digital live a Slide focused, purpose delivering have accepted, to questions plan with creating things we teams challenge are, aim a discussion, we relative people leadership to fundamental hard the critical the priority for like share Turning Jacobs, our X.X externally X. publication, And organization. beyond inclusion. on begins climate ESG At what leadership seeking an thought delivering released in we that strategy, stand our new believes company to and Building to thought we our thinking as are to week, change challenges and brand solutions innovative our Living for up last meet to is sustainability This with which talented we is by for

and first or visit our publication website examples perspectives throughout The see social solutions today's people at and We on to on of encourage of number from presentation, follow learn you media you'll resilience our action. a us is more. our focused to

Turning X. to Slide

commitments. communities carbon We zero global our solutions their to are net provide seeing for acceleration and an customer base across

enhance For U.S. help example, of a one a at goods facilities to confidential customer net part Malaysia. campus. opportunity. of sustainable call energy we've how during a their entire renewable detailed And photovoltaic the been accommodate UK solar hydrogen Bob by wind their airports of will rethinking east, their entire that, the that emissions by drive aircraft. future neutral of in goal supporting to makes a in of providing new planning reliability sustainable for for of billion Altogether, times. another supply the In of helping now sources a services to net to journey across emissions, rail in are growth becoming transportation today development result Jacobs grid zero With further energy may at comprising chain. project customer. ESG critical provide to Jacobs which awarded of plant zero And Germany, turn are positioned Jacobs company with consulting global largest ESG companies, largest in business. Shell's effort providers. as more U.S., electric consumer we're for them And we end-to-end we're And researching we’re carbon the them leverage power an consulting the line $X new with the business one Pragada Australia, uniquely we're the solutions And nearly revenue, our I'll via is for the moving solutions supporting their high operations over

Bob Pragada

Thank you, Steve.

Slide the Moving Mission performance quarterly to on to X, Solutions. review for Critical

Backlog resulting strong quarter, $X.X backlog impacted quarter our the at continued expect Total third by the growth. year-over-year performance. QX clear was protests, in CMS these is but During in CMS representing its solid business billion growth. in X% we backlog to

by focused critical national to and that solutions expansion strategy Our aligned CMS drive is offering growth technology-enabled on resilient creating outcomes. priorities innovative revenue margin

to clean analytics leaders global be As reactors XG energy detail. discussed recently that in better several with transition, American progressive networks. viability. discuss lifecycle growth or Jacobs trends, in energy practices those like to COX with strong, initiatives – with North we in electricity including investment the its community And advanced I'd nuclear This for to to quarters, and has can prior the in AMRs greater Beginning are realigned generation transition, power used and energy commercial deliver world includes ISR, trends for modular European solutions. bring through global recent fusion nuclear to wins and driving sectors capabilities. are intelligence global our across space-based of pursuing related emissions the and positive cutoff

Approximately that Cleanup region and majority solutions reduce the of Coalition. ten-year while billion protecting million as Idaho use value Aquifer, Snake backlog. recently Laboratory, cleared Jacobs partner Together with period River During the the the value critical will delivering at to high $XXX agricultural over $X.X is the awarded The quarter, cold the jobs technology-driven the included Idaho QX Plain of in quality National a we was Environmental Project protests. BOE, the be by in in legacy environmental Idaho Jacobs’ contract estimated industry. a will supporting element a Idaho's social and war,

times on technology, in a AESA and data the space Moving contract by classified as radar ISR. Mango satellite arrays out-think can the reducing advanced our for five from small systems. air, Low-orbiting sats. to by ability much information to than land, outpace, satellites than that Jacobs radar the utilized and is client surveillance our in technology scanned up component similar two-year Military military value-added advances Jacobs Jacobs perform predicts space. commercial, quicker commercial demonstration or with to centers its won in domains, area effectiveness these be multiple and bursaries active satellite an the This space-based of cost collect across advantage, critical those legacy delivering further the cyber, key has A increasingly prime, And are ISR, electronically to AESAs. differentiator use of a a this outmaneuver defense technology process an conflicts launch. space, less air XG aerospace the of in and of space-based enabling future won sea, to will the U.S.

Now of and cyber backlog and of in final a information into related to adversary solutions $XXX intelligence sources, and Security data, CI Jacobs’ Analytical XG that expected advanced recent analytical Intelligence a INSCOM’s, attractive biometric a an award security turning in from driving Group for support also informing intelligence Intelligence transformed This the Buffalo clear and Human awards contract. QX. support Services analyzed analytics. ultimately counter extension to multiple won terrorism the is and added services activity, generates commander's trend, Army's Group in Jacobs annual the acquisition and A operations. decision-making. contract often Command, quarter and are protests identity Intelligence Military The million a and XXXd to networks. collected AI trend growth support is picture is Army’s INSCOM. the during our award intelligence five-year from to U.S. of counter technologies national won with intelligence two provide

demand of for training. continued bandwidth Department accelerating Our fiscal as strong in in importantly increase billion, AT&T, and and to our investment robust see clients opportunities systems technology including beyond. billion and augmented remaining U.S. demand in mission environments in XX-month sales the increasing the for source about DoD an our XXXX the solutions $XX XG telecom T-Mobile XG and continue pipeline of increased virtual consumer margin the is of And year seeking to well advanced remainder The rollout as reality we like next-generation part strong telemedicine, excited from summary, and DirecTV business of with qualified growth the fueling The planning In new an applications, quarter telecom for higher of also with had health commercial and Defense. above business business. the $XX and gaming. result operate the a in remains benefits heavily We're selection, support is from CMS in in clients XG’s profile. of including

Places & business. People our discuss I'll X, Solutions Slide on Now

driven value We continue performance sectors focus key to global integrated geographic in platform. regions to strong on demonstrate strong high our by delivery our strategy leveraging

one in areas driven Third the and quarter resulting and supply both a margin. up long-term and gross are was chain of our trends as and greater backlog modernization climate times well revenue for demands clients’ mid- infrastructure, book-to-bill The change, X%, catalyzing as accelerated global digitalization, by pandemic investments. than

positioned are to grow. purpose change. our demonstrated world having remain As these Starting well and our effect with connected trends, climate results, These with to the insight business. global by multi-year to into I'd trends provide more make now we more like the on sustainable. align strongly

growing well recognized positioned aligned to energy results. and solutions, into actions, ESG to a pipeline forward-leaning leader very our we including transition, in decarbonization convert specific are As tangible

with front, combating win Force by health to to strategic our protect the clients human our and recent we the demonstrated to their on support key emergent PFAS. a as win Air environmental with in communities, contaminants, mission including U.S. work focus local On continue

wins, Force number Air addition the in In and resources. UK named Base Resilience recognized on new And as in Environment to Analyst we our global Coast at by water study Coastal Environment awards. winner Flood one leader & Florida, recently was work XXXX were quality the the a as Tyndall Agency’s

to infrastructure modernization. Moving

leverage in the transit east-west rail in winning monitorization U.S. projects uptick in authority’s, the rail and program in digitally globe, portfolio, partner capability UK, enabled such solutions. Zealand. These part metro rapid reconstruction wins a major New program the rail and our our as around we're As platform of important the our transit KiwiRail major

is that product clients such infrastructure section which a and One streams. revenue is analytics also to recurring Kaleidoscope solutions around and of new our use planning apply launched clients, capital are application, true to digital wide costs today. supports systems. and and Kaleidoscope risks, vulnerabilities predictive creating base interconnected maps a that sectors and cross client to allowing platform world, global of developing We us deploy and the solutions

Our solutions stronger innovative cross-sector competitive advantage gives domain knowledge us a opportunities. create in distinct developing growth and

the decision based of creating on twins for we support sector, and operational predictive example, scenario one healthcare to world's the analytics are digital forecasting. an first As making

goal learning and supporting tomorrow. to entering smart how We to an respective In government initiatives public Multiple patient scenarios. of storage and chip sector. rise response health in believe of their such This is cycle. are long-term our are cloud analyze alongside we machine been a seeing in their demand traffic, partnering sector, capacity healthcare Shifting manufacturing We historical have electric meteorological, data advanced unprecedented to and multiyear of integrating artificial in countries. are shortage, computing, time, intelligence optimize the data and electronic sharp we location-based launched given event to a reinvent and facility real growth demand our semiconductor large service with data fantastic grids. global is Jacobs clients in to example and as edge semiconductors the infrastructure with a

a in growth As for are with we leader well space, global positioned clients this and Europe Asia. the strong U.S., in our

are own production. increasingly manufacturing contract companies supplement means a biopharmaceutical to capacity utilizing their as Additionally,

Biotechnologies, programs, several including Fujifilm Research announced Park, North Triangle Campus secured large in have Greenfield Carolina. recently new We the Diosynth

Works also in biopolymers that delivery and producing biodegradable Thailand, design manufacturing from in with sugar through have our executed to Philippines. from including a secured produced resulting will The Nature We India major global contract model, products design from to the a dedicated resources. sustainable challenge be and facility are

deliver digital the have will that again, that other the win diseases. once an relates project and management wastewater it to breakthrough in Middle our services Abu of performing East. We're capabilities in domain world-leading COVID-XX pandemic laboratory exciting program we to virus for screen expertise combined a Energy Dhabi detect with infectious our Department driven for solutions, AI as a and water Finally,

Consulting X. on PA Slide to Turning

outperform PA Steve expectations. mentioned, As continues to

teams. New Consultancy built PA excitement wins UK has and across revenue Working recent UK and include the new that Management Jacobs win our synergy large Food of Affairs in the Department together, scale the look in large for sharing strategic coming Joint details other a research and And be program to geographies. forward contract, across quarters. continued regions to delivery. advisory additional and business transformation I Rural

vaccine trace is PA growth growth specific and related – the and deployment with at focused in On continues test life PA a sciences government looked to we both As areas, sectors. their consumer response, government's UK and support COVID UK’s projects, activities. efforts seeing now note, the on also

and disruption include that seeing in Examples experiences the subscription by and face-to-face life telemedicine. for customer process create online clinical good, pandemic moving As experience to online patients new virtualizing the from models. their changes for is business through sciences model products, service we're major trials retailer increased to interest from and a a revolutionizing in health digital offer and

insight. live a resilience, analytics, their intelligence expertise data unlock learning, and On the business AI, predictive and Unilever situational digital consumer to data team world-leading The and solutions innovations now can front, teamed provides to create global be to worldwide a monitors perspective. this prestigious for recognized Kevin I'll Beauty create discuss results. design were and to dashboard financial predictive PA's over With real-time Guide supply intelligence and from chains by TeakOrigin that our year's it turn product goods, machine and up awareness intelligence, tool, PA or operational and which to redefines iF how COVID-XX awards. that, CASI, harnessed predictive combined a

Kevin Berryman

Thank you, Bob.

a to quick XX overview. Slide financial for Turning now

offsetting the revenue with all digits. margin year-over-year more disclosed Third single burn pro and was in CMS. the was quarter off impact forma up from quarter, by revenue gross and two revenue to In low lower increased growth benefits acquisitions, contracts Including net XX%. FX contribute previously up XX% net last acquisitions line than

up both fourth expect XX-week quarter, strong considering basis fiscal total eight pro net The driven revenue as fourth XXXX and year-over-year weeks a mix impact was & year-over-year in margin digits at gross on was points a has revenue represents basis net reported well as favorable by both of Adjusted up to CMS, & reported GAAP of forma on million, Adjusted growth quarter the intangibles. profit the organic was gross a Places benefit as up be year-over-year. XX%. expectations was profit on the factors, slightly million few by PA near People growth. People will rate double accretive in was quarter amortization points million of which revenue impacted year-over-year as $XXX acquired Consulting, net percentage Adjusted which our normal we a in For strong and profit from our and showing underlying XX.X%, a with gross $XX to margin with profile. year-over-year XX% fiscal from margin growth XX fourth $XXX a up a quarters, to operating XXX our G&A line CMS higher up This XXXX strong compared our was revenue growth basis. operating basis. of mainly percentage Places by percentage and quarter approximately

growth ago PA the and addition, year posted operating profit versus during strong their In quarter second.

adjusted partly a remaining preferred tax impact the was the statutory shares included and share, with and points tax effective in and to basis our amortization rate of non-cash revenue Consulting offset related reported positive of updated investment. CX.ai $X.XX investment by mark-to-market to estimate of all $X.XX UK monetizing acquired the intangibles, our were and of of the impact of to portion GAAP related basis. rate. year-over-year PA to valuation to related adjusted changes allocation an continuing the annual which Worley profit common net Our XX.X%, between no $X.XX operating XXX an up per updated EPS operations original primarily rounded on consideration, $X.XX $X.XX from to

in by adjusted is earlier, XX% up tax reflect to was XX% a items, tax the effective all third third – EPS in $X.XX EPS item resulted adjusted XX% the impacted change share $X.XX, by benefit estimated XX.X%. noted Included an effective tax quarter adjusted year-over-year. in change Excluding rate during quarter. from rate our This rate per in tax XX.X% tax third the annual results to in estimated quarter adjusted our

contributed PA quarter, in incremental to the $X.XX $X.XX We now During up accretion from interest. previous of quarter. our $X.XX PA of net $X.XX accretion, $X.XX expect XXXX to of

million before XX% out up reminder results from backed revenue. interest our impact the of interest. modeling purposes, a net investment and EBITDA was the adjusted of operating in As consolidate with minority XX.X% XX% $XXX QX was non-controlling PA in year-over-year, representing we

also minority interest of Our adjusted impact burden the EBITDA PA. from the XX% includes calculation

was PA, Excluding year-over-year. adjusted EBITDA growth up X%

Finally, our quarter, to during times turning one gross for bookings on little the our QX margin with of actually was higher bit X.X forma level. pro ratio a book-to-bills book-to-bill a

Regarding turn reported acquisition XX. down revenue when basis the year-over-year pro performance, our X% on a X% to the of considered. Slide with Group CMS, forma Buffalo up LOB let's Starting was and is

year-over-year million As previously two represented lower up revenue margin during the which communicated, pro we transitioning $XXX impact contract year-over-year. When quarter. revenue runoff FX at digits was are excluding contracts, the CMS benefits, off double forma

our on $XXX improvement through impact XX% margin up year and this margin year-over-year expect our fiscal of these and balance quarter forma focus the approximately contract basis. points of on operating of higher million X.X%. from first two to by to $XXX quarter strategy The was basis profit pro was up We a was up roll-offs XXX year-over-year XXXX. million, opportunities. year-over-year driven CMS XX% Operating

revenue relatively now flat And impact profit CMS of fiscal are offsetting effectively extra wins we as expect week single year ramp we the in last the quarter, For the revenue to mid recent digit the of operating XXXX. expected year. expect timing growth reported fourth of

was rebound net a as & X.X% the to regions, QX international FX. year-over-year, Solutions. well Places in Moving benefits our from by People revenue driven as up

momentum beginning points over XXXX. driven into We near leverage FX. including developing to to of seeing of Operating framework half business last XXXX. term XX.X% earlier was XX benefit gross awards a positions While stimulus [ph] strength up in Bob delays regarding the second us P&PS agreements positive developments profitable enter facilities customers from This when margin a X% the well more year-over-year advanced larger next the week by our operating expected of quarter, as on benefit profit Total and the mainly our net result is year. fiscal from projects, basis with percentage business profit revenue associated was saw Americas noted mix. combined the infrastructure year-over-year the beginning with existing stimulus by we revenue up for as the a anticipate

million XX% in terms of margin million with operating grew PA QX was in our profit in XX% operating QX local line in PA's $XX In profit. PA's XX% expectations. contributed $XXX performance, year-over-year revenue and revenue currency. and

in non-allocated and and by medical expectations. costs and other our quarter driven was primarily Finally, corporate costs, with expected were $XX IT for our increases line year-over-year million The increase the investments expenses. up the in

given turn the fiscal We to momentum expect higher position increases costs, in QX company cost as slightly non-allocated other the corporate beyond. expected XXXX begin medical and investments, growth to also that in and is continued we in for the

charges As our have and included has charges activities. other a incurred as And we result, subject we well to total this other presentation. XXXX, for and quarter, turn the decreased. net as integration comment on in million we specific as restructuring a slide of quickly only XX, Focus not like during this to restructuring Comment $X significantly Slide would I that

a in focused we items significantly on outlook. with remain decreasing adjustments both P&L line As for result, going related our And these these outflows forward. are cash

underlying strong cash was items, the flow $XXX third one adjusted improvement. us purchase restructuring price quarter, included cash to It the we for we than items consideration free $XXX last cash this quarter the flow. track putting Considering on Focus free million flow year. associated million a for $XXX greater discussed compensation generated is for During million treated other post-closing showed and that over conversion DSO know $XX in as net million fiscal with again cash PA important cash as reported XXXX flow and time of these

in CX.ai is cash from reflected activities. for flow quarter, we also investments monetized investing the million, $XX which During our

$X.X EBITDA of Worley with we growth in of pro million and to treating billion, ownership, a adjusted expected of committed our of position sheet. given free benefit and strength debt XXXX increased net clear the the cash $XXX a our the $X.X year XX% debt times, of of net resulting And flow, $X.XX quarter ended our debt cash our is per X.X Worley the cash remain before to quarterly dividend, indication As as our sheet we attributing finally forma which approximately balance strength share. billion of result, to balance was the this

me XX. turn let Now it back over to Slide Steve for

Steve Demetriou

you, Thank Kevin.

total XXXX. Now review let me our company for outlook fiscal

Given be outlook from performance, the previous now adjusted year-to-date lower excellent our of from $X.X rate, results full our outlook $X.XXX billion range PA the guidance. investment raising our expect and to EBITDA billion. tax to billion $X.XX benefit strong to year billion we're of our a $X.XX versus the Consulting We

adjusted in $X.XX expect now to $X.XX. to $X We share of range EPS of previous outlook to the be versus $X.XX per our

significant to infrastructure likelihood stimulus the has beyond substantially second Jacobs week, The which benefit our become increased over and a XXXX. last U.S. of half fiscal the of our package XXXX year has Looking beyond. fiscal in P&L

repositioning are the security, and secular global infrastructure global we chain our investments. climate to supply portfolio, With trends, national growth of digital strong transformation, change, including modernization, strategic aligned

now As beyond. EBITDA XXXX drive double fiscal this digit call growth we'll a for Operator, questions. result, to we the and expect in open adjusted

Operator

you. first of comes question the from Your Thank Stifel. Instructions] from Joseph [Operator line DeNardi

open. line Your is

Joseph DeNardi

the about a talk little just bit. Intel you contract can Bob, morning. Space Good thanks. Hi,

I'm forward the us can correct I that opportunities capability? cash what me you. remind Thank And think with competitive you what Kevin, level a the are if being that are then was you conversion? set wrong. then And are kind flow free can from just excluded that going of process, the outflows additional

Bob Pragada

Yes, Joe, morning. good

really Space technologies disclose is to a the do we're array project. but Intelligence, multi-phase decline, type not unique this around – technology. some the has it's our can't I the with of On And

so end project. of on And of that the we're front development the

And continued see we growth so there.

of the to coming also that, of out Radar or again, seeing Just investment but early front. our we're component A Rapid couple Aperture confidential air-based that SAR business. the nice what's is onto seeing really of add with Solutions Synthetic what wins on technology the phases, our there

Kevin Berryman

restructuring about, are we quarter. quickly we have on two just was Joe $X another But you with flow is that's just P&L we which most material and $XXX about, cash originally run part one it strong Those P&L. because XX items with that which added million of GAAP, matters compensation was relative million to the cash also me reported plus flow to numbers of ultimately talked we're $XXX associated real pleased of XXX, through talked there's treated free take of free had effectively. our PA the the the The the adjusted the for that it. related timing the to two heard our together, But million. Really and very consideration.

Operator

Your next question comes from the line of Andy Kaplowitz from Citigroup.

line now open. is Your

Andy Kaplowitz

good or guys, afternoon morning Good guys.

Steve Demetriou

Good morning.

Bob Pragada

morning. Good

Andy Kaplowitz

and to related yet. your regarding ramping business advanced cycle When Is to your sharp quarterly longer-term better know more actually or uptake you is it contributing talked over a build-out, you period. meaningfully you last commentary is this I think think up activity, Bob, P&PS meaningfully growth as FY I you chain advanced facilities mentioned Bob know and in can sciences, as you life imminent you potential do to quarter revenue semiconductor it to contribute which facilities earnings Bob a XXXX? supply most or I super bullish yet at growth? start mentioned a point Steve mentioned, but

Steve Demetriou

project, flow concept we call see fast we'd go. Yes, the start projects. of which off consultative Andy. be P&L how basis be to higher early projects it and the now, of We through in it with activities, Right design FY really phases and XXXX. would type programs those margin subsequent these It are work, but

years through So with to the regards would how we're not P&L. those measuring in quarters burn

Operator

Thank you.

from Research. line from next Dudas Michael Our comes question of the Vertical

line open. Your is now

Michael Dudas

Good morning, gentlemen.

Steve Demetriou

Good morning.

Bob Pragada

morning. Good

Michael Dudas

infrastructure kidding, was, climate I Maybe where is of myriad opportunities. your U.S. transition on P&PS next you of more I'm base pike little and bit could your how years? can to of optimism their given the fair change, leverage with there's what some about but guess coming the we – U.S. from indicated the see a you energy could numbers over business the And lot several potential side and opportunities down Steve, the from a the delve grid, there. what kind agreements of relative customer deeply framework be

Steve Demetriou

for thanks Michael, Yes. that.

this look, engaged. to obviously we're highly based news And optimism So that. all the are very I on reading want with we're we and start do building

it's Our influence States. this government highly done outstanding job team which Jacobs, an for United important it's to course relations for U.S. have outcome, but help of important the

of when going got state authorization. when offerings. bridges, Jacobs going significant going the we obviously we've evaluated drinking five-year And dollar, be of Amtrak totally will fast quadruple energy center civil local growth. whole of onto Jacobs where trillion to And going and Ports leader, the half is $X times, a to hubs, other through And talked course, then which and is go way in and and billion our waterways, and two significantly. But significant up leader things, the which growing providing components other provide in flow. is to the fund therefore, things transit clients the pretty hydrogen $XXX aligned you the of opportunities, industry huge. to starting we're which of tack like XX% a at we're and that, right transition what is you because Corps That's significant it's also that's rapid highways, you that over Michael, host of that, resilience billion same like here funding, that's And about certainty, it's which a And in wastewater, then money this for solutions. across that up what money are you is doubling. of and than freight industry then rail, look super Army some be So a new thing. – more our water to right we're and works,

great, moving So opportunity just great a Jacobs forward. for

Operator

line question next Eastman comes from Sean KeyBanc the Capital Your of Markets. from

now is line Your open.

Sean Eastman

– initial more Focus up on It about cost around type the XXXX, Focus a from my and questions. of just perception quarter. it taking is I How was the bit of feeling to of think think fiscal kind you reflected EBITDA the of outlook about? a the Could for hits it was you the maybe thunder Analyst should Thanks strategy, clear how guys. risk estate the in Hi planned digit real beyond save but maybe Day, touch double to than we through growth wanted Focus talking XXXX XXXX I XXXX it's talk just seems that. kind like guys for much how at model?

Steve Demetriou

company it transforming Yes. a Sean. the effort glad the far because Focus is the executed entire to reaching way work. across question, we I'm the answer being that's about XXXX Thanks for

becomes We've So how changing footprint our estate that. where we're of want about the we're training, that to do ensure certainly about estate less way go work we and way real the part is that you talked changing yes, team and and hedge collaboration, our more relative real about down a to because utilizing footprint we place work. building,

what effort facilitate of we're integrated effectively more of we going more much a terms call ability part which of the a it but will automate, that. I aligning, to management And of our than which facilitate projects, creating to process clearly our doing is create administering spend designs, will talk processes, project is So And the when about world. disciplined in that, as our teams people it's our less that's what huge around to time. the

and we the unlocks of that So this drive talent to think really talent future innovation. time

the numbers, allow of next incremental us benefits that reinvested bulk will by the be XXXX, to finalizing Now and said, right what back savings, the we'll XXXX, relative and on XXXX in even business deliver what potential opportunities certainly into now in that our to the we're beyond. double is wave of the digit in we plan working

the XXXX it's piece a ability we our types ability we're of while a of of that into We to substantial to So drive or a business. the think to and that more deliver into not its work, that reinvesting double work, to back all need translates it preliminary guide, planning digital company continue piece doing a on about, because it's invest. is talked of at number least becoming different digit

a into over the course consequently, be the back vast of so majority the will of XXXX. savings reinvested business And

Operator

of from Revich question Jerry Goldman comes Sachs. from line next Your the

open. is now line Your

Unidentified Analyst

of if could several Hi, the this PA Jerry us there was is quarters? Adam incoming cadence in you think just next Consulting, today. wondering engagements in for I help the about

Steve Demetriou

business the about playing the this sides. is rise Kevin resiliency, Yes, of investment seeing talked on private on chain talk when supply is Adam, about both we the We're engagements as pipeline PA sector in on the moment, are transformation, growth. growing. well backlog just concentrate kind as for a

were so booking pipeline the definitely seeing And engagements and well itself itself showing it's or from as growth those growth. on forming rise we as

having see it. on we a tail nice that outlook So

Operator

you. Thank

from Our comes the question line Chad of next Dillard from AllianceBernstein.

Your open. line is

Unidentified Analyst

on this of Hi, is Carolina Chad. behalf

Steve Demetriou

Good morning.

Bob Pragada

Good morning.

Unidentified Analyst

Good morning.

growth PA the can from As expansion? our the think revenue and out Consulting margin you term, digit over about EBITDA second contribution double growth medium you parse

Steve Demetriou

Bob we've as space intelligent. because of – in the we major pipeline when over our we years the to that we our capability talk via starting last making, as the or example, of going there their even into legs three the think then cyber significantly, mission Group. to our cycle, some over of Consulting, from KeyW about that to offerings Department most together up solution And about CMS center Almost Defense Buffalo working XX that Blue the that there the recently and in XX the of Canopy, now the pipeline. business, of be we them talked P&PS. intelligence the directly back of deep talking talk intelligence all and focus new that all about XXXX We're proven double-digit really opportunity to this with FNS expand contributing abilities robust and role you we're the shifting about and I a growth. of into we And that systems CMS specifically, then and as with that growing the The recent intelligence. The range. upgrading, wide about directly for exploration, seven center bring acquisition, now networks, excited Space we billion at the a modernizing like of for. is the well about when move capabilities created look The the leadership Intelligence. business moving most rising. XG our during beyond, remarks. fact as and mission I cyber and talked standpoint we're there of we're of business – really and $XX mean, put are eight that more things We critical is in plus But I all mean, space in where play on is agencies projects. to the and

CMS other to So the exciting the side very to going P&PS is and PA. contribute that of opportunity

Operator

Baird. of you. question from comes [Operator Instructions] Andy next Wittmann Your Thank line the from

line Your is open. now

Andy Wittmann

Okay. Thanks Kevin that question. just statements I for to make I'm the understanding correctly. guess clarification my sure had, morning. I taking financial Good for three

The that quitting first out PA whatever million $XXX was one or your for $XXX that has expense to looks the number with, some you rules consideration. to you release. happened purchase excuse of or from in like the It million, had at called do here on quarter net last retiring me, press GAAP like net people the

far $X was me, I that which quarter up had secondarily was in excluded you've segment, was accounts a was million tell PA I And there. that can in segment, an or gain showed a that if then a down So, noticing that I of benefit $XXX wondering EPS receivable, difference accounts quarter? there the adjusted was to that taking as benefit in receivable. the SG&A? in excuse ever was, And is million And as which then best as there's

structural did Kevin, talk receivable quarter a on performance? the that's very about there's account the So, timing just could think do wondering, you element or if in whether I was you just you good related to what

Kevin Berryman

through quickly. because accounting all The me also non-controlling kind of so, not complexity but first with pieces one and backing all stuff. been of associated the Yes, interest that go and equity the of we've the the that PA and about, let talking out

take All P&L and John provide not did a little you're to alluding can can of $X we that that to. John. that, more million that follow-up maybe But our bit there we detail benefit you

we [indiscernible] accounts of as relates particular to a single is is, $XXX that thing free that think it necessarily flow sorry. quarter not No, quarter. look, million receivable, every something a is indicative I in number cash sustainable of certainly second The while of

teams It globe started fruition XXXX the last about to really for good be, and three that around or has doing the I so dynamic. say, do that would are we've what And than could nothing been the talking years. some to come there see with we've timing And the to other that years. that two associated the over XXXX work

where accurate where able doing proud of do a to This is They're and good and out So sooner. ultimately facilitating to teams. to, ability which very we're our aligning faster the the fine our ultimately tuning to something invoices, we're more focus invoices of is having being XXXX collect processes, with some people job. are work doing get

doing just there in. extend hard single forward. there to total working be old necessarily and going these we're while good up But it's down, some its with every we on collecting efficiencies ultimately fashioned, and quarter continuing to that that the assume improve it, timing to good So, happens associated kinds don't is certainly work, and think will will sustainable of And while our work numbers capital. blips be sooner,

Operator

from Jamie Your Credit the Cook Suisse. from next line comes of question

Your line open. now is

Jamie Cook

Hi, Two good morning. questions.

more looking to here thinking then pretty in get on that First, on And good. Kevin in double-digit understanding – but help the CMS the cashflow opportunity is leverage right and the margins wanted to pretty the in XXXX, And P&PS question, as just anything focusing there performance? net then pretty about core some the XX.X%. if I at the margins, were what's boost second we're that at point was is margins now, you're range? number my de-leveraging, or what's the last to those good just know good is

acquisitions? Thanks. have feel type XXXX, do you at the about look how deals on consulting we too be think do should we what or that As you of would thinking point comfortable more at again, much you a, more opportunities PA like And to would deals your plate? doing

Steve Demetriou

driver it, to, And plays talked margin. that, is what out, margin Bob see, mix $XX of that It's higher as billion. about profile. given typically the the we'll to

would getting our we're our term grow and that relative our into of a year Our continues margins end discussion businesses, on that wait of will strategic across to CMS. going objectives profile margin but is commentary in including included is all our our longer that. go Probably our Investor to hold to expectation certainly our and up be all the businesses the able CMS to Day, that of in and at ultimately be

I So, think thing. that that's one

one. second The

Bob Pragada

really So strong let value-add we've started that special. strategy that Jamie, There's it's mean, me you just nothing about. talking been with. by questions P&PS I driven the add

performance. So a not growth M&A cash our business, of there The fast other side and as talked We're we're and obviously very excited the It's approved our from flow synergies about, P&PS point about the the far on than high great you've to pleased standpoint, up what balance for start with with that platform. consulting. clearly, a very Jacobs the proving about PA up margin, high talked how we we're out as total significant sheet.

we're as clarity strategic consulting developing this end and year. But the get we're we'll going finalize before of of key approach to the And is our going be side to strategic clearly to part the one strategy components so, of the new unfold.

Jamie Cook

you. Thank

Operator

Andy Kaplowitz from line, comes the Your next from Citigroup. question

Andy Kaplowitz

been early Hey to could the still want consulting. follow-up about how it good far, penetration, just has in in lower bringing but successful morning I into markets talk your as you've so maybe It's obviously PA on again. PA you where U.S. such ownership,

the had big deal a work consulting far more work be obviously in toward so because capturing Now guys. [indiscernible] successful could more you for you front-end been front-end push

Steve Demetriou

bringing be I'd been probably three of we immediately on first traditionally getting exceeded into larger clients. I in the at penetration months on on. relationships trials, had other items, kind say, the them to the MedTech expectations of a at the as and PA specific, this into question, more traditionally or point clinical the Tier that of X, the Andy, of just even U.S. to PA part few X it the scale honed we're PA Yes, be of a such on whether Tier sector looking in X digitization of of Tier few sciences would bring private And kind and Tier their And investment information the types piece. component first Tier life is to technology, or and same or those it business, X. at product offerings a able X the health rank of We've more

So that's piece. been – that's a big, big

bookings Secondly – and out regards to quarters. P&L to kind in and where we're their of from the the numbers the seeing it are percentage in of with those leading growth coming

was announced had publicly piece, big in and and Second this I it the script.

continue as So, look go to frankly. PA design how next to Fuji can job, we on type at the entire approach. our we – deliver services automate our to with is faster, generation on quite working us Fuji

up PA example us core the chain. moving So, of skills domain being digital into value the and expertise of it's our brought great a

really So, strong.

Operator

UBS. Your comes next of Steven from question Fisher the line from

line now is open. Your

Steven Fisher

being talked release nice I organic call the it Great, we I got it a for was think press I if so take I the of late, growth can the and morning. growth about next structural on up, or years. from in initiatives maybe Kevin curious the offline. set over the thanks. Steve But comments know, this, in you've pace Good about of little growth there. covered just a several apologize number

we at segment. longer it of of now? know be something thank growth? timing a the could we're are inflection is still, function and how you digit and cycle place here you. in about more curious growth, in much Do that point you of that businesses, EBITDA core, Just a see CMS right sort your I If fairly of accelerating could talked that about color little P&PS Is the it think to takes going that double there, these revenue in still you fill just is XXXX? acceleration

Kevin Berryman

Yes.

like stimulus lot in about especially few what's and going similar Saudi and about is is in strong and de-carbonization, and over parts New move So, pipeline in the Europe into when we're expanding the Similar we across the a modernization, to sector. have mention defense in me we're look, region and growth the also talked rail and East, drivers U.S. organic things Q&A and side in programs a the hadn't Australia, in really yet the APAC infrastructure, the we talk And places rail with then U.S. opportunity airport outside a activity of seeing on then Middle but the And regard our things Zealand. clearly as pipeline side UK. on a on we the with let new in ramping with going organic on some to there well. high-speed we up, of good focus on

Australia, sector across there sustainable the whole pipeline Zealand the power in Also, solution. transportation. Solid New and

with Bob opportunity ramp rapid going we we on that's especially When around that. U.S. quarters, it's start take programmatic and is grow around to Jacobs’ look are to see step organically, up what semiconductors. life next When things So what into as wanted what's to talked – funding. the of you more opportunity of a of kind we a talk several back at going about Clearly bulk be in different this a because infrastructure phases. over electronics and sciences, going be to get what about

And I formulaic so therefore said. funding, should've

the will more around early flow parts the few that various in we get to of with some as resilience And other But a way of is initiatives some the take and some to and XXXX. mission the transition, for quarters of on government And sort will so digital and of opportunities, extra ramping the flow it, that therefore up even critical energy newer look will things the has funding some our come the it's great our agencies. of and of funding then and frameworks happen our and that into some moving very focusing to quarter have the a of And the years, XXXX meaningful we've XXXX quarters way to hit – impact it and hit question pipeline, it about into tends optimistic several that peaks. it beyond. we're it unfolded and this over in, building up when next if But last talked the you comes, around does to we're only side, the certain does Jacobs later? to solution back in couple is going or the a

before So about very just bullish to grow to overall, to deploying capital even organically side. we on on ability we continue the be think M&A our

I so think… Okay,

Operator

the Speakers there please are continue. further no in queue, questions

Steve Demetriou

Thank you.

Okay, thanks all Stay close look forward to of questions. safe, everyone. appreciate you. and I with to staying the

Operator

and call. this conference concludes Ladies gentlemen, you today's for Thank participating.

now may disconnect. You

Jacobs Engineering (J) 3 Aug 212021 Q3 Earnings call transcript