J - Earnings call transcript Q2 2022 | Jacobs Engineering Group Inc.

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Operator

Good day. My name is Savannah [ph], and I’ll be your conference operator for today. At this time, I’d like to welcome everyone to the Jacobs’ Fiscal Second Quarter 2022 Earnings Conference Call and Webcast. Today’s call is being recorded. All lines have been placed on mute to prevent any background noise. remark, be speaker’s question-and-answer the after there a will session. And Thank you. Instructions] [Operator And the to Jonathan like I now would turn Doros. conference to over Please go ahead.

Jonathan Doros

Good Savannah. to you, Thank morning all.

measures have filed announcement X on presentation of pro to for would which and during materials morning XX-Q like earnings reference website, copy information were the will statements, call. Our and this presentation and our non-GAAP we figures. regarding Slide the posted we slide to a of you financial this forma forward-looking I refer

forma comparisons, results as period. Consulting pro BlackLynx StreetLight the For PA periods current full well include of Data and the our as including in the prior strategic investment recent acquisitions, for and

Slide agenda the on to Turning X.

Demetriou; Bob and of a strategy Chief then then and more launch the President provide our metrics discuss of Bob Pragada; today’s by line our in-depth Financial will will making cash Chief performance Officer, as against and our will review discussion the and review and Jacobs’ on our flow. Speaking will Steve our be Operating business; President call Kevin Kevin balance of as we by are updating our begin Berryman. financial Action of Officer, progress and well Steve CEO, Chair Climate sheet Plan; and

to of ESG on your and Throughout we pass solutions. questions. presentation, Finally, of some Demetriou, Steve in details the we’ll leading examples information, over for this call will ESG-related I’ll presentation provide along our appendix With with outlook, now the then updated our CEO. Chair the some provided it closing remarks, including open and that, additional Steve and

Steve Demetriou

our enabling history. periods boldly the moving our a discuss company’s against update for to quarter joining you, business year inspiration innovation launched inclusion, and we strategy details culture across In in second of Thank of our March, most unleashes which on strategy. performance exciting of the us fiscal and shared forward, Thanks, Jacobs, execute new us today XXXX everyone, to an newly our one John.

is robust Solutions. business, with Climate additional Data driven lines of excitement the & the Our Advisory by strategy Consulting areas opportunities across all Response, performance and growth new multiple accelerate in opportunities our to surrounding of

across are national Jacobs, technical those across of navigating professional the scientific a sectors We serve services set combines For and modernize with their proprietary protect of that clients to to infrastructure are security, that and we new company and cutting solutions. to a knowledge engineering supply that technology diverse disciplines a deep global edge variety need to like are chains company creates purpose, the shaping growth operational upon By values our of facets embarking opportunity no the multiyear for Jacobs. and staying we for clients. reinventing other, This their solve our transformations all problems environments. of way dynamic we generation innovative are and of digital while a solutions true next compelling for decades a

level Places and the pipeline. disclosed XX% well margin net as PA win, business. our that gross last resulting access number in opportunities XX%. Critical U.S. quarter, large clients revenue Consulting Act grew sales growth approving the and while Infrastructure adjusted funds currency, intelligence and We line professional People grants will record outstanding with from with quarter, Jobs XX% larger Solutions we reported of entering space Mission year-over-year growth operating wins of awarded were growth the constant our another as strong our of delivering year-over-year had an year-over-year XX% from profit several quarter increasing benefited Solutions, in with each revenue up higher developing revenue to an profile. and the company Bookings strategic X% enable margin including services profit During backlog were a & across across of

and by electric driven Our record life sciences, year-over-year achieve wins the to vehicle Facilities business rates sectors. growth continues semiconductor, Advanced in

to visibility increased adjusted outlook confidence EBITDA the no for and adjusted and fiscal change our are midpoint. EPS remainder with XXXX the our we Given the year, tightening of

the XXXX, enhanced conversion creation. expect deploy beyond us flow we capital to Looking continue to ability value strong healthy with growth for affords that organic cash

Turning to Slide X.

outlined and playing we a new driven externally. our neutrality emissions updated launched Action clients, and both our with strategy carbon billion net recognized As from commitments have Working revenue to launch, stewardship urgency with of top resource, and transformation. during corporate ESG climate record a knowledge major delivered purpose-led solutions we and internally domain And our April, we with and this of business through delivering our sense in on role ESG decarbonization, company threats. adaptation, we co-creating have are mind, and reductions of transition, mitigating the another Similarly, in step solutions, one Climate we are in greatest status. we energy approximately significant align took of generation’s solutions made the standard. global commitments new and are $X to combat zero Plan resilience, natural track With our achievements international our a With pivotal climate-related deep we our significant crisis.

validated neutrality ensuring Our companies electricity Science operations. response it our I’m share to to client turn a first XXX% Pragada first project ambitious undertake we opportunity, becomes achieving of also detail organization value low across by over to zero in Initiative. net business. net carbon and maintaining by emissions that, consultancy by Targets world’s Based to client XXXX have proud commitments I’ll every provide more we approved Bob chain with the our for that of carbon zero are targets line With one our the include

Bob Pragada

Steve. you, Thank

strong to forma performance quarter X% on to Slide Solutions. The increasing continued Critical Mission Moving basis a on in X backlog billion. business $XX.X pro second the CMS review to to

a provide Also, to Service XX/X a awarded offering include with cyber all-source we guide is tasks national intelligence organized energy won of and which were manage threats. Readiness revenue to Response, we finance. and intelligence analysts the DevSecOps. business Component and All-source Joint AI space Commands, core our increasingly solutions, and prepare, [ph] intelligence required focused sources, threat digital operations strategy to U.S. technology-enabled our and sophisticated security seeing crime data Our multiple contract models management, and clients advancing coordinate security, support spectrum This transition, in CMS solution Data DoDs assist utilize national and offering analysis as drug this exploration. energy. customer is AI a on offerings signal, are the all-source collection to better by tied through trafficking, for dataset Jacobs the year threats and to Jacobs’ require Consulting strategy to across market and by all-source solutions that full and space for market on dissemination including and capabilities comprehensive include Advisory Combatant national Center creating like our all geospatial, aligned intelligence and measurement Artificial and and strong of open to growth Climate time our Commands. all-source to the second resilient signature levels to quarter, encompasses Army’s aligned on Force, making. and the Task accelerators, critical and Beginning intelligence key specialized Army’s Three has seat development, margin intelligence, human, increasing specific visualization, priorities. DoD underpinned Joint trends expansion Intelligence to intelligence, focus growth threat growth In service allow intelligence source, continued these cyber beyond secure decision real are &

operating recognition portfolio are energy must components emissions, [ph] transition to Moving on from gigaton of with equivalent of emission free Energy to the by operator year, B nuclear years and nuclear of Power ability to that resilience a more away solutions. include positioned Jacobs carbon We UK, nuclear zero well the Sizewell the recently in to station’s along weather global There grids, plant, a stability renewables net dioxide by XXX cars. that always global to growing energy can conditions, only to we electrical Every critical as its nuclear due to a the the to energy, and energy XXXX. were delivering in regardless located the fossil is life awarded contract achieve to fuels. annual unique on provides transition. XX/X provide. power Suffolk, generated now nuclear than Nuclear of of leader economies of support is supply, million extension generation XX EDF averts a ensure power emissions from

science aspect expertise nuclear our Another our of capabilities. remediation is strong

Laboratory Our in Department has team and won project the Idaho faced remediation in perform Contract Ridge for the National environmental Idaho Oak to the Tennessee. Eastern of Reservation cleanup environmental Energy work at the successfully

occur including in Launch Artemis this the return System the Exploration [ph], space the we and person and X-year first maintenance book highlights contracts. which The test NASA-Jacobs contract, originally for the Finally, by supported X Space first NASA’s color. Jacobs continuing with million past Artemis launch this recently of $XXX Jacobs the Human mission flight will Artemis won on to exploration. partnership. aims integrated in QX, mission demand Also will consecutive to NASA fully X the for win Deep NASA, operations the this Xth Moon humans program for but uncrewed were for Space XXXX, first woman NASA be and rolling summer. we out Program. strong The Ames in awarded and victory to In XXXX,

half support contract we of from the of profile. Space than expanding in In next Defense of Australia’s and the remains see with qualified new including in was solutions Space demand Control. billion pipeline space Space in Command Jacobs a add This and Surveillance robust Deep implementation margin Ground-Based continue $XX CMS business quarter, the billion, for an to Advanced solid beyond. XX Space to with $XX sales The selection our source also capabilities Department Electro-Optical Deep Radar, awarded second month XXXX summary, more new

Solutions Now our Slide on business. discussed are & Places to People X

diversification, continue that life chain geographies, in with with will while the P&P solutions, respond sales performance being Our for multiple across and to specifically, results at modernization. semiconductor to X% discuss health and backlog sciences diversification, the climate strategy under health themes sciences and infrastructure Starting I and data U.S. chain actualized is manufacturing, supply realignment we supply building and supply strong supply our increasing manufacturing. of infrastructure growth, real chain life markets. momentum response, markets advanced demand quarter and in and secures time

resources, the models To sciences class facility both and and expansion and for multiple care and for global resilience. of reimagined electric and semiconductor is facilities ecosystem, Jacobs manufacturing of Europe. expansion for system electric deliver at with the specialists an team to organic working Singapore, we’re patient-centered production and Ireland implementing the seeing industry, in experts unlock transportation planning Hospital. improve Alexandra with delays U.S. state-of-the-art vehicle to bringing battery global investment clients a leveraging we’re Nevada semiconductor DoT recent capacity phases expertise, of continues and design Michigan lithium-ion expanded Act and critical the Denmark. alternative sustainable fuel related awards vehicle Jacobs’ a shortage, facilities in Funding. clients co-locate Infrastructure to life to automation address agencies U.S. to Across And In contract for in for in manufacturing capacity example, drive For clinical U.S., that world all geographies,

remains the Jacobs carbon our center with Response. in an calculations a award client. to clients materials of carbon data Climate on major impacts to biodegradable for recent on study from true from a areas advising NatureWorks with forefront embodied ranging Moving

deliver facilities programs the grid portfolio, and of in climate national material one United wind transmission, seeing Louisiana, wins wind a farm country. States Australia, the clean largest growth the pipeline underutilized most convert the innovative transition by in and response project in large an energy wind in as to We’re to in port Northeastern advanced with offshore our UK evidenced in and coastal offshore support resiliency to energy

to our options In remediation an in award more airports across XX at have program its study first-of-its-kind Australia. than resulted solutions addition, PFAS investments in for nature-based innovation

world Solutions, to Moving our to our class clients. deep solutions platforms expertise Data digital our technology-enabled combined with domain bring to

UK, the impacts Consulting with enabled infrastructure New forecast of equity, to strategic with and and State upgrade. are plan support Siemens and recent and York StreetLight digitally Our EV to social multi-sector is acquisition charging Jacobs investment renewables [ph] PA transforming economic environmental protection. Hampshire growth, solutions to In working

connected smart confidential Additionally, with for highways national clients. secure and we’ve had win infrastructure an exciting new manufacturing and

reuse Yarra In $XX discussing is Valley infrastructure. and delivery challenges, Water with to of we In trusted legacy to we a renewed for and awarded aging our up with delivering social to coastal Now, create resilient port the being Los Angeles, facilities. in with of are helping plan Power infrastructure safer, Alaska, were equity reimagine and excellence modernization, infrastructure financial of a a water contract extension by development expanding clients years our to our a resulted more Department representing Jacobs partnership. efficient XX And Melbourne, protection. recently faced for a Water billion Port adviser of master and the contract

saw This Infrastructure line growth system transit in quarter, U.S. Act York communities. leveraging the largest significant Metropolitan clients regional and includes X of ever. This in bridge awarding expansion rail their underground strengthen with Transportation New we rail and Authority Singapore to rail the and equitably Jacobs an

manufacturing. We to also the energy and water, strengthening Greater expanded Copenhagen Continental infrastructure NIRAS Overall, double-digit portfolio as framework we’re X-year environment, across agreements due with with in Copenhagen that Rail. is in partnership well Light advanced pipeline Europe for transportation, the seeing Metro stimulus growth our and global as two

impressive as services through to ideas allows markets quickly unique efficiently as response, PA growth on Slide sciences. commercial This on capitalize and PA to accelerate quarter. another success. clients global to concept Turning enables Their new to had health life Steve growth mentioned, such consultancy PA and and digital trends from Consulting and X, climate

health Physicians first-of-its-kind on for will generation adolescents to good, for force in it’s the platform College to build This a the skills Emergency the as and market, a next nation’s advising how PA use American and children, of adults. digital infants, healthcare Specifically transform it currently and young operate national registry. continues

there the PAs are which response, of breadth climate examples on Focusing X demonstrate capabilities.

the a rollout consultancy is charging new launch electric where country. the fund of across drive infrastructure first services government the infrastructure vehicle for to PA The a of UK for provided

is market cellulose company PA IP and partnership use this continue produce fiber-based The packaging plastics development to win lower footprint. partnership examples evident XX% to confidential and show in Ken I of their the extremely different month, X I Consulting CEO, PulPac Secondly, to Jacobs’ offices alignment at patented exclusive products attending from countries. part and with Jacobs’ as joining global that PA recorded the celebratory developed the X,XXX road an employees and sessions revolutionary positive single a of States. PA Swedish R&D all have accelerate PulPac technology. alternative with and PA different the X-year met crucial X renewable Toombs, their It go-to strategy the creating and these PA and a last over PA had X to United plan strategic for accelerators. growth to continues our feedback. to be privilege COX up uses quarter X to pulp solid

and build results. continue year, continued to on to I the forward collaborative it Kevin We our our collective to turn for our I’ll to now look over during successes discuss financial world. and success first clients

Kevin Berryman

joining and to fiscal are Thank a good results. for turn all you, call to Like second us Bob, today. of quarter on financial that day XX Slide our overview the to XXXX

impacted although year-over-year, to the grew year. Currency timing points, and rates, margin for QX, negatively remainder XXX the and quarter growth given and the FX forma revenue for net XX% pro revenue between revenue. Exiting pressure revenue contracts. X% acquired gross approximately environmental remediation up our spot basis the lower lapped current continue from was X% fully Second grew large we the FX X expect difference impact procurement CMS of we contract by

environmental net gross Adjusted expect as high-single For the was the the revenue in improved percentage fiscal net revenue a total driven large year, win margin digits. growth half in mid- XX.X%, offset remediation quarter the People we up to CMS. impact, of second in of the Places in XX by ramp and from basis the by revenue project points & improvement mix partially PAs new

consulting XXXX, drive a against revenue to past technology mix. higher and our strategy we execute as Looking

expect as gross to was Adjusted We we continue a Within of G&A, expand. down initiative. are to year-over-year for prepare recently the up as percentage to G&A XX.X% investments the businesses, revenue quarter. margins improve first Infrastructure slightly making as of net the opportunities focused our investments our in are stimulus, who well passed efficiency XXXX from to other increase to U.S. from

of included million, intangibles. on from amortization by was of costs and million of disclosed operating X% G&A million $XX Matter costs. lower operating in trend our year. basis. to charge for April acquisition operating CHXM $XXX with was impacted a $XXX $XX related the slightly in efforts with mainly legal related was we a expect profit costs forma around GAAP as associated and profit percentage acquisition other acquired GAAP pro down the to deal year-over-year, was the Legacy profit We million were revenue Also $XX Other and restructuring fiscal and up half Adjusted costs. related million, remainder

acquired from amortization revenue of Legacy was a charge continuing intangibles, share, related the to per $X.XX CHXM to a $X.XX the operations of other restructuring rate GAAP $X.XX the versus which tax A impact Our XX.X%. related for net $X.XX and included $X.XX legal trend the charge costs, previously to significantly profit related our Matter and EPS in settlement the adjusted year. of costs. our transaction and higher and operating to was expected continue quarter rate full impact from lower mentioned

Excluding XX.X% quarter EPS $X.XX. adjusted $XXX year-over-year consolidated these net second was million, up revenue. nearly QX items, was EBITDA and Jacobs adjusted represented of and X% was

saw to backlog. turning just ratio a profit increase the under bookings was the X.XX profitability times, continued on book-to-bill our X.XX but in quarter, basis, revenue a in was during gross as Finally, we our

basis. up performance, QX basis Starting negatively our LOB forma and FX XXX by X% X% turn on growth points. up let’s CMS revenue our impacted XX. to was Slide with Regarding pro year-over-year nearly

of our win impact Idaho. quarter, from the left run lower large and procurement a large DOE of the timing growth revenue margin CMS at remediation contract During environmental off the the from benefited contract

driven driven from space and with was the second our X.X%. awards CMS contracts Cyber strategic increase CMS and expected Intel we award down beginning operating new half XXXX continuing basis revenue profit to business telecom profit to our resolution year-over-year continued Operating XG providers strong was revenue the recent performance down during approximately relationships margin large environmental result, run expect $XXX X%. show million, a intelligence points to by to rate. performance ramp. by large in growth delayed Accelerating full QX XX in its double-digit a As from

awards the win that higher expected, continuing operating the by to environmental up impacted the pushed were cycle margin margins large resolution. remediation of delay were our shorter As do right and the the ramp of

to expect for above remainder the XXXX. trend profit QX of We operating slightly fiscal levels margin

People to was negatively year-over-year Moving was net from points foreign by QX up & and exchange. basis Places, revenue XXX X.X% impacted

advanced and business semiconductor driven facilities Our investments was net growth, year-over-year, pharma up by revenue again, supply chains. the in double-digits

We facilities fiscal growth robust continued expect throughout from advanced XXXX.

Our international currency growth, funding. more the by steady had government year-over-year despite QX strong also determined business impact from

impact XXXX, half net second fiscal moderate we the For of unfavorable from the to growth revenue with of FX. international our business expect pressure from

& the to front revenue by Moving from People work related driven improved net Places in infrastructure Americas, QX stimulus. end growth QX to

resolution We’re build seeing XX our to the in and the pipeline from XX projects. stimulus the months from meaningful infrastructure budget benefit

as us year-over-year, G&A again, margin profit provides we operating gross driven the investments in was our position by longer half. business and but year-over-year, projected term. to the QX in sequential quarter fiscal continued second acceleration expenses that the bookings strategic spend, for profit gross confidence us first Our down increased second growth half QX pipeline XXXX P&PS gross versus profit grew Total in of

profit million revenue, in In currency. PA grew in operating adjusted in for the year-over-year margin constant was dollars $XX profit U.S. QX and contributed QX revenue terms XX% million quarter. in XX%. of and operating $XXX XX% PAs performance,

currency and and XXXX thus reminder, year-over-year impressive. more revenue a operating even revenue XX% and for grew performance margin, PA delivered As margin making a year-to-date year quick constant fiscal profit XX%

for our to million, costs communicated expenses Our now up year-over-year expectations $XXX of our as be lower end non-allocated expect within at were medical non-allocated the We fiscal corporate XXXX. previously and to million costs moderated. our $XXX $XX of million range corporate

year-over-year flow, employee discuss modestly PA which of of which our was quarter The the in Idaho and expectations matters to an other. win from net the by related with capital had associated we free related Slide to in to their with million FX offset net had generation $XX cash our driven cash $XX cash working another of cash sheet. our Australian wins cash ramp ticked by million up effectively bonus cash turn March, To flow have restructuring. legal business. annual balance reported and with environment monetizing our CMS DSOs CMS Let’s dollar payments, benefit flow included flow of new the XX shares. timing the line line now tax-related given costs quarter’s timing of settlement repurchased of a of items to solid and offset the $XXX We discrete impact partially approximately million CHXM since date the large each

before, and said have agile shares. will our we remain repurchase we opportunistically As

settlement quarter, in sub next legal be items, CHXM cash onetime to we million, quarters. over the of with toward impact similar our that cash better the expect of related cash achieving conversion expect target legal the and for flow free remain income partially the adjusted to free we affected track cash going on conversion net settlement, other free $XXX forward. or Adjusting the flow amount tax restructuring by Next nearly benefits, flow few cash $XXX of gross million matter offsetting

strong QX As we a a $X.X of net of debt to net X.X adjusted the flow, debt $X.X second estimated clear $X billion of of expect billion cash EBITDA the Pro resulting in for our sheet strength flow, cash ended flow. a our forma we the and balance of and half of XXXX gross indication debt. our including billion with legal of result approximately cash quarter settlement, continued cash and the times

cash remain we quarterly to our dividend and announced. sheet flow, committed recently balance which free Finally, given our strong we

Steve XX. turn back it over I’ll to Now, for Slide

Steve Demetriou

Kevin. you, Thank

inflationary us environment. ability the multiple providing business scenarios and has model under during portfolio an an to with proven asset-light diverse grow economic the to Our pricing ability resilient, manage

guidance. our fiscal Given the and midpoint our visibility increased tightening maintaining we XXXX, are and for outlook competence

to previously. from We $X.XX range the And $X.XX to billion billion previous the in guidance. $X.XX, is range outlook our $X.XX now billion of $X.XX to to EBITDA $X.XX billion EPS to the of adjusted in $X.XXX adjusted expect $X.XXX from be

XXXX, and now past financial open provided for in call Looking questions. launch. growth increasing continued Operator, the the with pipeline strategy our our provides achieving March the fiscal sales targets backlog us will we performance conviction multi-year we during

Operator

you. our [Operator Instructions] from will And Goldman question Revich first Thank come with Jerry Sachs.

Unidentified Analyst

this Good for Adam Jerry is today. Hi, morning. on

Jonathan Doros

[Indiscernible]

Unidentified Analyst

Hello, can you me? hear Hello?

Operator

Adam, you…

Jonathan Doros

case switching over that line please? hear in We’re the line, you to can’t With can repeat another so you question, us?

Unidentified Analyst

is Adam this Hi, on for Jerry, can me? you hear

Jonathan Doros

hear can you. we Yes,

Unidentified Analyst

Thanks how guidance? for my thinking you Can movements FX taking with question. you’re context recent talk about just about in the

Kevin Berryman

Yeah, question. look the a It’s – for one. thanks good

almost potential with year. for with to the pound we’ve But going seen foreign relative on the being the guidance uncertain probably to $X.XX our of in the But in significant As the think in able associated over second actually some that it’s of in rates, other that in half week a there’s range do plus. the offset that exchange specifically incremental we last change sterling. challenges things

going think developed holding to we ongoing that an on forward, obviously gains last time of But over certainly, we’ll at couple point still we’re as basis. there’s effectively, So the be this profile days. monitoring that’s and about an the in incremental risk

Unidentified Analyst

about geographic steady CAGR through XX% we margins laid PA flat. how of then for the should margins once Thanks. That’s And assumption the XX% in And you we think but changing mix? mix, Consulting margin to expectations expansion to your out result revenues a business? update, in this with grow get then XXXX, helpful. Is strategy for flat

Kevin Berryman

that things couple there’s on think mix to it as I of the going a dynamic. relates

and and been, PA. what in have our in said, the plans have very very, been They’ve sustainable the believe the of that term. utilization we kind even at don’t high team of we past, longer strength which As both above incremental is model the deal at over factors, business, running for

because in. mitigates really longer-term and of more getting held the sustainable of profile in which more margin trends to being gross profitability is incremental margin ultimately, So that’s the that But probably of business level rate a new upward that utilization back profitability. strength coming just about of the longer-term, it’s

margin So all-in-all, actually really by while outlook, the flat has business. it’s or by a gross been utilization underlying their they’re in underlying offset decreasing which increasing improvements a because margin strong factors, it’s

Unidentified Analyst

Great. Thanks so much.

Operator

question Stifel. come next from Please ahead. will Bert Subin go with Our

Bert Subin

morning. good Hi,

Steve Demetriou

morning. Good

Bert Subin

How in your sort CapEx anyone. is of about you the are you cost progression remarks, advanced Bob, as prepared that semi surprise rising of the industry, comes target? you no EPS your growth towards facilities mentioned think marched EV thinking as and I to $XX

Bob Pragada

Strong.

I of think being X business, time first months from now it’s kind sometimes XX for that long right time anywhere a Bert, for in that in forward, that space. look the us XX to

seeing We’re XXXX, visibility in pipeline from a perspective XXXX. certain into and cases well into

play strategy So, this cycle, part. a in it will material play on

Operator

Dudas ahead. next from Michael with our Please And Vertical will question Research. come go

Michael Dudas

Good morning, gentlemen.

Steve Demetriou

Good morning.

Kevin Berryman

Good morning, Mike.

Bob Pragada

Good morning.

Michael Dudas

mentioned $XX One, on in $XX could Maybe CMS have for, side. Bob, that remarks the billion billion maybe, I pipeline, you things. prepared you discuss of the mean, you intrigued couple about a and

that more the And better compare? Kevin, interesting IIJ what’s the some provide. on data as we opportunities I book-to-bill is X.XX have an pipeline say, the now point. quarters. think about that not indicate next, and How’s on margins will exposure several said, margin more better event you over only How’s the that discussion We in to areas, will backlog of And, could the just facilities, into supportive bookings, addition but trend? that but mentioned the be other you international

Jonathan Doros

or Kevin, Bob to who go Hey, first? want

Steve Demetriou

it Steve. pick up here. I’ll It’s

then this going of business start up, sequential wrap to expect we’re start pipeline we’re rest and Kevin about PA. through and as And as the said, on on continued XXXX. really far we to year significantly Americas half that growth the Bob that, And into facilities to So we the as up in the P&PS this goes, already years. second to increase, far seeing of the as But going start year to other, we’re moving the moving few – U.S. look see as strength as the see to to P&PS next of the talked we’ll back in significantly advanced enter see ramp more

is billion to is As the projects. incremental front be billion close and the in has that early going and to formulaic. of of flow obviously, we’re end grant that as And, that earmarked $XXX U.S., a far programs stimulus, about into on to the infrastructure been specifically $XXX money that tracking going defined process, of lot that for

environmental, should going going our nicely really And growth. to also globally the of federal that we to and a on drive then that’s should start so of infrastructure be help XXXX. dynamics lot something And enter as flow business because

On Right start the diversity of that that a going space portfolio. is Critical the strength intelligence now, the to our of now cyber finalized. and rolling and lot we ramp-up hit nuclear excellent as that Mission year, out nicely the to opportunities as an pipeline up that Solutions, the classified to win, to telecom, what’s fact ramp businesses we’re really intelligence of as this we seeing start have and should XXXX. is in continued playing of our obviously, robust. resolution And finish And the up

more higher especially last ratio. prospects significant gross And XXXX in and we second excited move and book-to-bill – and the quarter specifically, that we’re all-in-all, So, about was as the far profit, as of because professional bookings services of into a the beyond. pretty half, margin as the

profit, about we as are what so, book-to- excited that outlined, going increase we’re is bill in gross our forward. on an seeing pretty And you’ve that

Operator

Please have go question Sean a we next, Eastman ahead. with from And KeyBanc.

Sean Eastman

for Thanks questions. team. morning, taking my Good

there at curious, in CMS rate be one just for top-line you exit heard but I’m around that, outlook I not a heard the you as perspective that bumpers keeps variability XXXX? some of there for sure that all Kevin, the I’m PPS. the from into still some into second on putting or half, clear is that guess, helpful. I’m any second I sort So, trajectory growth what So trying PPS can growth in half? get we’re provide really going color to I is very would very

Kevin Berryman

is It’s CMS because dynamic that to strong see some accelerating growth well. able we of sequentially, that QX, to editorial we half the out. do of going seeing means that as growth ago you We what out call of the People the with the get be the on compare the as Look, comment associated of calling growth that figures year wanted to we’re not growth second level CMS into Places. in lack sure we’re of and that & an in when believe to really, make year,

look that in in talking the quarter, CMS, So about second QX growth we third not but figures versus QX. see were versus we in necessarily sequential double-digit stronger in it’s even quarter

we’re for positioned a getting – result that. a of think, XXXX we as strong QX So,

sort us is be the helping look, long office to and figure for attributed incremental play way a program our is So to the customers teams bill, to identify access. a our think, and really that helping gain the in to monies great are highlighting they what’s going into And going that for when going that’s to here coming hit management longer-term really going and be doing able to build to think aren’t start infrastructure out where out I that’s I pipeline. our that infrastructure work

it. about good pretty So we’re feeling

Steve Demetriou

going second sequentially And just margins as at is that the held into with to fourth talked about a improve profile other on P&PS Kevin the the we G&A – – to in is third, we quarter down point the the quarter. pre-invested that that look margin that moving about one

utilization We’re give going a a the significant margin. going in change on see half second G&A to to better a profile that of in start the us to that’s much

Operator

from And Chad will with Bernstein. our next Please go question ahead. come Dillard

Unidentified Analyst

of do infrastructure morning, And volume over new years? more inquiries Chad. Hi, good design This picked peak few next activity Can please on give color everyone. up you will the this How’s for you Brandon the the is when think that year-over-year? some on side? on

Jonathan Doros

Bob, you that? can hear

Bob Pragada

I Yeah, did. Sure.

of XXXX [ph] on it you at more some in on of standpoint, component. course these that in bookings at QX, available. X the were inflection you which XXXX. But look X the we hone the that those a are unique jobs and how over planning those really studies, already going And QX the mode. these on monies These lumpy the jobs, were are And design was recipients were and now when QX end that from when the in of business. front to incrementally, to immediate approved, CR if to is to look profile the in the actually it what burn we’re next point So, jobs and of quarters, accomplished seeing

so of opportunities seeing time, yet. some them them the and that So we biggest UK in we’re a and feeling quite But we Australia, of specifically middle outside the the are the positive. long transit rail haven’t bit in overall U.S., actually of in quite good booked we’re have a in –

Operator

UBS. with from question come next Fisher go our Steven will Please ahead. And

Steven Fisher

morning. Thanks. Good

I potential So range upper more as in in outlook the kind upside what the your of that suggests biggest still you some we end uncertainties. Jacobs, And range. typically, would the you on your narrow confidence of guess, of with wondering general. see areas more expect still and

that downside taking sort should down, there other scenarios, I’m by considering things wondering be of scenarios that here if and that are we this So upside

Steve Demetriou

FX all more raising I is, Yeah, And to projects top side, say how programs is confidence. awarded. the across just and going with what’s get of there, specifically. an get indication mind just political question bottom the was uncertainty on and I’d activity, line this think, of the obviously, our finish are the activity, The geopolitical that’s out

of no just that anything the it’s how canceled, confident We’re there’s around more concern things getting half. second in really timing the unfold about

sort the it where of And to midpoint so of that’s where keep quarter. spite in second decided we is our strong

Operator

Capital question And ahead. Markets. [Sabahat Please Khan] come [ph] will go our RBC next from with

Unidentified Analyst

morning. good and Thanks Great.

sort in maybe run continue expected IIJ. the invest coming the from full have have at the investments relative And until to ahead around terms you those would bill? of you that’s are? some talk U.S. things? Just the just rate bill, there’s those from about infrastructure timeline Is part second point investments the contribution lifecycle are the of a coming going what How the indicator, gains you of where commentary can in in the in this this of strategic in to you something

Steve Demetriou

go investments. me the first, Let address certainly strategic and

are focus investments the and future, goes this specifically, this will XXXX supporting initiatives, the substantive the that have more program be less into which specifically. year, forward substantive We year are will how but depending upon

ahead to investments we’re starts I building when burn, the be provide the And and think strategic of to we because though, sure value of to able specifically biggest being quality in added curve number to clients. that we’re to really need satisfy able developing ultimately, headcount, as into employee to relates it we to our make our solutions and our people backlog deliver high that’s terms the the up there. pipeline that related, are translates relative the

the So that’s biggest. single

start our of idle build, versus that sequential Places figure. our you when growth is about XX% particular we & time momentum which we charged time to So part are a as time to the of the of get talked occupied and CMS, that that People in have which ultimately XX% G&A teams,

So G&A numbers profitability that goes of single numbers are this as going ramp start people. we terms the to come, that’s come G&A down, to we’re in up. investment And making biggest the those fundamentally,

Operator

our Wittmann will question next go And with come Andy Please from Baird. ahead.

Andrew Wittmann

had had adjusted I going comments guess, you if mid-XXs. in X the the Thanks at here low $XXX at the taking said, in I I be million the The range. to going the prepared to you’re around it be the for, quarters, wanted the end. in guidance of quarter very just end about that came that guess in corporate million guess, $XXX questions. Kevin, I expense, it’s $XX my are they last running remarks, implies ask unallocated been you the million it each to XX lower for Great. to

rate implies the that talk about more that low I unique in that bit second little wondering quarter? And the if in so was second quarter, that something the quarter, in what if was could you fiscal your What you adjustment that $X.XX And so going and could it to? happened made discuss a this that related also the there? this $X.XX outside be out Or to of year? sounds called that year like out? is a only period to Was why tax this It this was for called for was you as rate higher? the an was tax prior

Kevin Berryman

of me we’re Look, not. a G&A go making talk the about when that to and really as to one first No. as let timing, the matter investments to is opposed we’re

in really from it programs, think don’t when the about a and we timing terms need don’t perspective, of pre-spend so And management of we our to.

ultimately perspective, a Andy. So it is, all it about timing that’s really think from

the around to plus relative rate the expected it minus our about on year. relates as And to just the adjusted for tax but either beginning in year, tax, book on our effective of to took fluctuates past, that. issue last effectively, we’ve then, our is tax As talked other be what we or rate GAAP course, that rate, to going to to

this that to the that think tax an going year. just be to that adjusted always time the is effective really expect really, it’s and the GAAP on year. so clear. Hopefully, just adjusted between And the quarter we for difference is all that rate in So back full to an different, number Until to adjusted book for get figure is adjustment is the we we it figure that put full the basis will that’s which is.

Operator

Subin a ahead. go have Bert follow-up with we Please from And Stifel.

Bert Subin

had just Bob. clarification quick the for cut off I got follow-up. much a for question and so Thanks earlier

is the you the being side? of sort the just the the visibility, advanced result also semiconductor of and EV on biotech step seeing a mentioned we’re On to more facilities on question. side? Thanks commentary, starting are you that see Or again CapEx the function what extended, change for

Bob Pragada

concentration and Yeah, a also bit changing to of become that as before one Bert that on model really side, talked more kind being is forefront it’s the both. business the shortage. a as foundry. of of clients about well have the those of And clients those clients we’ve the we Semiconductor of of chip

going of and that visibility. seeing one kind some biggest one providers So just not generation is greater of us that the an is through, that’s of this classic GMs. we’re OEMs, next is giving but these EV which that’s the driving play, But out the perspective, company beyond. From that visibility the EV extending spend Fords, XXXX to the visibility into and come

that So from market clients necessarily we’re getting data. not exclusively our information

Operator

Please our Kaplowitz And next with go ahead. will Andy Citi. question come from

Andy Kaplowitz

Good morning, everyone.

Kevin Berryman

morning. Good

Andy Kaplowitz

mentioned in CMS year, forecast is little up for know the we the half services think but color of doesn’t I and For helping? telecom into some how your growth us right more little obviously, of ramping cyber better it second ramping seem recent you some one up your double-digit I space think much which that Maybe a now, sluggish the government for of and suggested wins. is you? give than But Idaho, could of about you the like peers, a instance, peers is

Kevin Berryman

on previous There’s incremental our yes, in earlier revenue as from call. the of to really there’s is of announced. the project. ramp little outlined remarks a small things. Look, that’s And multitude think bit in see starting I the a incremental burn I not look, of It to intelligence piece That’s driver. a relative wind that space the we the business the it. ultimately Idaho That’s we’ll

relates quarter to and course, ramp resolution that it incremental of think seeing to was good that’s drive it was opportunity. going putting growth. then, continuing be I helping pressure cybersecurity are as of we And last also the in some terms

relates the part on not it our occurring, huge as the It So are growth those while positives, given XG stuff. high all of it’s focus that’s a telecom, to business is a business.

we of think, I that we’ve And happen, the it’s to diversity portfolio power excited expected getting now we’re and growth numbers So within CMS. back to of be the really out until QX, in about the going and happening. been exhibits all of QX it strong that added to calling together, and

Operator

question And Suisse. come with ahead. Please Credit go Cook from Jamie will our next

Jamie Cook

concerns through good restructuring just X what I help did repo of managing are stock the the But But, which on Consulting to help line sorry, my as you I’m you and asked a in help just I on business know what then potential which downturns? you your prior more you of of in during then, morning. any lots go out investors So would given preference a be performed And some Hi, resilient how cost models calls. right and someone and apologize. back. recession, top just I’m [ph], do [if and actions PA this can can just parts you from terms – well degree, macro getting for – margin cutting Thanks. of – what there? now, we’re business I resilient, this] side? questions there? degree buyback versus more And if of sort but understand sort would me be to thinking other acquisition, acquire, of question, Kevin, ask

Steve Demetriou

me with resilience. Let start

resilient in with this, over the you forward the capital it going more record. past, of be But than to portfolio time that and for on Jacobs look, even as fact really turn the we infrastructure to is Let’s we’ve good know, U.S. lot Jamie, and which side the deployment Kevin, had that our economic question. Clearly in the potential a into be we spent track positioned uncertainty that a especially around sluggishness to going resilient the as leading world, governments we get believe

And economy top law. the to infrastructure. look that, and we’ve got of that IIJA the to going on We’re with create jobs stimulate then

world. that’s pretty the around going out. with And about protection we’re momentum side, needs around the what’s the we then, increased the and play pipeline critical course, whole backlog, so And that going building, and that’s on geopolitical to positive that in cyber infrastructure of and spending have defense the – on

energy some continue with all to need Kevin, by the shortage, is the slowdown uncertain of for deployment? solutions. even economic which be the downturn, to then critical pandemic, business, of to demand on And and We feel on life in mission to stands, economic resiliency And Jacob so well good on capital bode that’s on going going the that could dynamics because chip about forward. historically and which sciences, even facilities impacted transition pretty has our advanced going the in a environment where happen. the the focus pent-up

Kevin Berryman

will that that in recent – relative there to against for Yeah, we this But opportunities current could of be Jamie, the list at executed impacts. that be large We that question. M&A that we shares in potentially side the paying like with out thanks, the the time. investment mean the the settlement doesn’t on a aren’t

months. point our deals doing time, the price dislocation not last this real large the in probably in few We’re at particular given share over any but certainly

investment. that like we’d So

smaller So the probably and I think, acquisitions. certainly, maybe some mix repos are in

Operator

call the conclude I remarks. turn would to for Demetriou will that session. back the closing to any And Steve question-and-answer like now

Steve Demetriou

Thanks your talking you next attention everyone year. look for and and Thanks. we forward focus, to to

Operator

participation. conclude you will today’s disconnect. I now And And for you Thank may your conference.

Jacobs Engineering (J) 3 May 222022 Q2 Earnings call transcript