J - Earnings call transcript Q2 2024 | Jacobs Engineering Group Inc.

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Operator

Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to Jacobs Engineering's Second Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions]

I will now turn the conference over to Ayan Banerjee, Senior Vice President, Finance, Treasury, Investor Relations, and Corporate Development. your begin may you conference. Ayan,

Ayan Banerjee

morning. Thank you. Good

refer and Our metrics. a posted will material during like for morning, the our X website, financial earnings was filed reference measures, to would call. I statements, announcement information we the to slide presentation we Slide of have which this you forward-looking presentation non-GAAP about our on operating and

on Turning X. agenda Slide to the

cash CEO, providing Bob Bob on overview Pragada; in-depth interim provide metrics be today's as review financial flow. Speaking then Berryman. by call a as our CFO, our results. a activities, will recent of Jacobs' begin from second an and will of Kevin more highlights balance Kevin our of well and summarizing discussion quarter will sheet

will CEO, to I that, Bob over it turn Pragada. With

Robert Pragada

and Chief Officer, Thank expertise year quarter second everyone, X brings welcome Kevin to our day, discuss CFO CFO. experience interim you having as for Berryman, I to this a and our his fiscal to us years. Kevin wealth for over served and want Financial good of previously you, back and Ayan, following joining appointment our as XXXX role, performance. business thank President

he with and strategic leadership and played & planned businesses role During his Mission and ongoing Critical our Solutions its overseeing significant most as as merger transformation Cyber separation Intelligence pivotal tenure, the navigating growth recently, in in has a well exceptional organization, across Amentum. demonstrated of our

for of permanent executive an we we As a with CFO search move forward, assistance the initiated a have firm. search

of smooth at CFO with Kevin towards Jacobs expeditiously and to provide next has remain overlap to grateful the ensure working are transaction, search that this concluding a are separation We through transition. the close our agreed and

X. plan. Now I on cost our the to optimization progress want moving emphasize solid Slide to

prioritize profitable and We lines cost simplifying expanding across optimizing our growth model, business. our accelerating structure, to business our continue margin, of

portfolio and towards on less remains complex, track. shift a higher-value strategic higher-margin Our

create connected to to our enhance sustainable scientific-based, more a streamline efficiency opportunities actively are to operating while and continuing world. value-added, and world-class, solutions deliver identifying We model digitally-enabled

significant made receiving pleased investment we under to Solutions Critical approvals to Mission a milestone foreign competition the by Cyber and transaction. conditioned separation have that We our and have clearances laws that & progress now planning. significant Intelligence all on achieved We're report and are separation direct

are We summer. Form our targeted early steadily filing for advancing XX

fiscal the remaining the fulfill to transaction of conditions half expect complete second We of in and year closing the fourth the XXXX. quarter

revenue growth X points I'm second basis report adjusted X% to net year-over-year and is increased growth. backlog entirely and continue consolidated organic. increased Backlog deliver and to QX. to will pleased growth solid by driven confidence that XX quarter our profitable margin business Turning approximately that X% Slide revenue boosting and gross year-over-year, X%

of reported operating top Solutions of profitable People Turning year-on-year. XX.X% Places to business profit line quarter execute adjusted Slide growth solid as X. growth, XX.X% of and absolute line we demonstrated margin of record of growth operating by our continue prioritizing as over P&PS strategy to strong growth & adjusted another against

up X.X% X.X% growth and organic year-over-year. continue We adjusted revenue to drive up

Our pipeline revenue to expect continue digits and growth single to organic mid- FY remains high we 'XX. in P&PS robust of

of this Corridor. initiation management accessibility X busiest to largest tunnel award Frederick been of significant the provide commissioning marquee to systems the tubes from for and program across passenger national for multiple infrastructure selected market quarter, Northeast In the high-capacity for several enhancing improving and wins contract have we service Tunnel transportation, will Amtrak's transportation Douglas section During XX-mile through Program, billion rail $X core we electrified investments the passenger one and sectors. services the delivered railroad, most partner have team delivery as The transform IIJA date. trains, America's construction and

World team, management we program our in of part our collaborative continue integral In U.S. emerging our the long-term Angeles Los demonstrating city's events, an 'XX presence of Airports LAX services Los partnership. in Olympics. the for including upcoming the preparedness management aviation, at power transport program provide Los their enhance with is relationship and Consulting sporting Airport. at will PA to the Infrastructure Angeles improvements Angeles International

provide by Water and nearly treatment suite wastewater residents catalyst to Jacobs County incorporate wins critical treatment upgrades million design of thousands greater a by and of the in operational solution growth confident a county's digital hundreds intelligent strategic sector our and with will key as of Miami-Dade its further achieve optimizing position visitors decision-making costs Department to the year. X.X Sewer to bolstering each and X Water plants, wastewater one-water remains benefiting from several reducing geographies, our products across O&M, our digital appointment for labor. evidenced our efficiencies,

AMPX XXXX by water. Corporation, part from one Water plant we Additionally, the Utilities, solutions produce alliance Furthermore, largest Alkimos operate, billion strategic in we cycles, the Corporation and Water to supporting with in of maintain Desalination cover were is design, team an listed to were from selected the the its XX and Australia. expected Australia, Perth, major ACCIONA, U.K.'s build, utility largest water to to and water of the selected United ultimately capital Seawater gallons Western of The drinking period project, works which through optimization companies, by XXXX. AMPX program

has U.S. also will XX years expected PFAS compliance have Internationally, steps working The PFAS legislation environmental in consulting, impact services. the been our are demand these management for years, sector. regulatory increase been first EU Superfund engineering, contaminant some and X remediation drinking water program, significant environmental forward advising developments and anticipated the how clients services. discussions We've U.S. to These moving our evaluations. for them regulations progressed, as with and taken risk ago. our hazardous compounds X and weeks, began with about major classified PFAS in set banning as maximum EPA certain the for under the expanding compounds, compounds recent and In potential levels

chains with our them products PA robust on and Defense, materials market the to regulations the create chapter. With to presence, strong as navigate how that their Now about as supply by to work options lead products their with space. U.K. from position PFAS of next ready demonstrated in Department advising we're that companies as assessing with is this remove and government and and leading working are clients alternative Jacobs finalized, materials. Consulting well ongoing in having aviation to conversations this our how evolving have our is expertise, Australian authorities, their

see positive operating XX% and the The our trends as In In was is basis XX CMS, long-term pipeline prepares up are growth expansion. adjusted we the X% with we for several CMS revenue the at continued continues profit double-digit team grow by and are pipeline increased opportunities for merger positioned for Amentum. year-over-year, QX year-over-year growth. approximately margin significant points well, and driven team to continue in life rates There to long-term relationships. with executing sciences, overall well of

PA industry-leading execution Consulting adjusted solid and XX.X% discipline. delivered among an of cost operating margin with

to quarters operating XX% in continue the margin. exceed to FY remaining adjusted 'XX We expect

software the and some Our in across with HM quarter, multibillion-pound partnership previously and the the PA differentiator agency. wins Douglass with a framework Frederick be mentioned including for government Revenue Customs intended upgrade appointment systems Tunnel to an nice continues the U.K., to the in to us

to the XX% adjusted Solutions profit operating period. XX% in excluding have Divergent operating margin license approximately sale large adjusted growth, a performance been which a Palantir delivered solid at and comparison would approximately

and suite globally. can Our elevating provide the of digital to value clients are platforms products our we

In sectors. summary, we remain growth on well our core the capitalize market to positioned opportunities across

our financial to turn review the Kevin over results to call I'll Now detail. further in

Kevin Berryman

you, Thank Bob.

We strong are our QX pleased results, with quarter. to leading another

high-value providing supported to margins, commitment by on our and operational solutions in steadfast excellence with continued are emphasis our We improved execution.

Slide for me a summarizing by of So on quarter X. the let begin highlights few the

transaction, $XX costs expect million materially the year, separation acquired associated $XXX year-over-year the of including million GAAP revenue million with driven intangibles operating X% grew revenue We separation was and quarter by included profit our net million amortization X%. and for and for cost transaction. gross $XX be fiscal transaction. million of $XX still restructuring the restructuring other adjusted approximately the Second $XXX quarter grew to total from and

adjusted XX.X%. the intangibles a by $X.XX $X.XX charge was were amortization to restructuring materially discuss share and other EPS and per continuing transaction, dynamics operating segment $X.XX review. driven the the GAAP the acquired I'll from Our impact related of costs, transaction. related underlying and included reporting margin which of was separation from during operations all

of these $X.XX, EPS quarter last our second year-over-year adjusted marking benefit to non-GAAP X% adjusting quarter increase. Excluding When compared decrease items, EPS a current year. the approximately was tax discrete second XX% an represents year's $X.XX, for previous

an representing XX.X% was anticipate rate Looking effective full EBITDA up strong maintaining was the annual year. year-over-year, adjusted forward, revenue. fiscal for adjusted net XX% of a tax $XXX and million QX XX% we

The profit revenue year-over-year. backlog our X% and X.XXx X% Finally, increasing ratio backlog up with was year-over-year. book-to-bill gross was

funding more government space strategy in and have ratio large regard QX ISR in wins programs, my for with comments, our detail change growth during book-to-bill in significant X.XXx, onetime been segment with strength which would the to quarter pipeline approximately in and a expected I'll Excluding describe QX.

business of let's quarter, Slide the the performance Regarding of our in X. to lines turn

was particularly are year-over-year. XX.X%, approximately profit Places the We to operating net year-over-year. basis up profitable our Reflecting record Adjusted up & adjusted growth points strong growth, People operating margin segment with pleased Solutions. a was commitment saw X.X% XX.X%. our QX higher-end at adjusted performance revenue in of XXX

business. the in see solid to and in profitability both continue We momentum growth

grown large the as our This backlog and reflects project has to our increase in X% some the wins improvement in wins efforts backlog. by occur year-over-year, to X% quality ongoing critical of Our in profit a seen QX. and bids we've expect our we gross enhance

Mission Critical to Moving Solutions.

increased with Our X.X%. QX X.X% up revenue backlog year-over-year

operating to year-over-year, of points Our year-over-year avenues XX.X% basis adjusted the while approximately up as profit improvements. business was rose margin continued XX adjusted by operational CMS find operating

loss our to in mitigate expected the a some is program will help second short-term the recent pressure shorter-cycle on recent While half, awards impact. put successes

work the to shifts in program government show business mission-critical, against and funding Our long-term resilience remains adjustments. allowing

Solutions. Let's now on Divergent focus

in we profit. QX, revenue year-over-year net an decrease XX% year-over-year observed During and decrease in operating XX% adjusted adjusted

a would in year-over-year. adjusted operating period, Palantir been the previous Excluding license have XX% up profit onetime

with in success. by programs, strategy While backlog space-based are near-term momentum we a was which funding sales, believe in by contribute our negatively on encouraged impacted ISR to positive DoD ongoing will the the we change

the let's macro industry year-ago a a to saw decline Consulting. in QX consulting comparable. driven continued and turn revenue, solid a by year-over-year challenging environment X% our PA in attention slight Now of

However, basis increase adjusted XX.X%, from cost sequential deliver execution strong previous a quarter. operating margin the a of and discipline helped point XXX

our emphasized we call, earnings position is both purposeful critical. our during and is As uniquely differentiated last industry work and our

continues pipeline to growth. deliver result, ongoing in positive a momentum As bookings PA and

operating year. half the remain above XX% for deliver our of in profit second margins targeting adjusted to ability We strong confident the

were costs million corporate in QX. unallocated adjusted Our $XX

continue We on to simplifying and our optimizing operating costs and driving make progress model down.

separation to per quarter post item annually. million line $XXX trend towards this $XX expect We million or

free discuss as negative cash After year the Turning million flow cash exceptional our levels XXX%. balance Slide cash strong And for and in flow free X a forecast, flow full adjusted conversion at to our free quarterly working remained in positioned $XX to the the in QX, reported QX deliver QX. well was sheet flow the cash quarter, impact we cash flow. maintaining free delivering this increased from for capital as in year. approximately Despite the planned well of has conversion performance our half a are our second XXX% result, reported as the first to on as

to to delivering to $XX $XXX capital consistent investment-grade authorization. said, the as to repurchased remaining maintaining capital opportunistically repurchase our shareholders. million credit during dedicated We we our shares Regarding to of still capital have under million commitment will current while And remain shareholders we an committed have returning reflecting we quarter, profile. return remaining of allocation, our

billion. billion We debt cash of of ended quarter the with $X $X and gross

Our of sheet. adjusted remains our continued QX X.Xx of net clear of approximately indication strength the to debt EBITDA a balance

balance the QX. portion our comfortable sheet, having a become with of feel debt strength in current we the Given of

We our using options: our have transaction separation from refinancing, revolver. upcoming ample proceeds and/or accessing

to of weighted approximately tied floating rate debt, As approximately interest of of QX, XX% debt and is our the our was rate average X.X%. end

flow, cash dividend quarterly our free of be The year-to-date authorized and a remain paid June quarterly on year-over-year increase committed to sheet to an Board has balance XX.X% we strong our given $X.XX, XX. Finally, dividend.

Bob, back over to you.

Robert Pragada

Thank you, Kevin.

our stated continued business, to Slide confident feel to previously our Due XX. ability to our our we in across objectives. reach momentum Turning

growth This tax EPS incorporates XX% year-over-year $X.XX a guidance to XX% respectively. remainder of the of and range at $X.XXX year representing adjusted are XX% to billion we to the and rate narrowing XXXX quarter X% EBITDA for adjusted result, midpoints, year. the to for adjusted each EPS adjusted the effective fiscal $X.XX $X.XX billion, to $X.XX, and a fiscal a As QX

Additionally, year the fiscal this the second XX% represents a EPS growth period. versus half in of year-ago XXXX

invigorated to their solutions science-based most continuing are for select demand Jacobs complex we digitally-enabled as to strong, remains challenges. our clients closing, with In address

the confident well to call on infrastructure key and market sectors. Operator, are grow We critical in fulfill will across And positioned share exceptionally we the of ability momentum needs our in the market. capitalize the questions. to our for we remain now open clients

Operator

first Andy Instructions] from [Operator Your the comes of question Kaplowitz Citigroup. with line

Andrew Kaplowitz

you prospects us the Kevin, going how & about the give then can Places? a a larger X% ISR see in going with on can elaborate us or but in some with about just you on backlog know talking that nice in you or think could Jacobs' more color give color backlog on what's forward? more Bob into about for to the year-over-year, it backlog up People Divergent, CMS, you more is change going I impacting said acceleration Places the correct, is but you're business and that And Do & half QX? growth happened space-based a in second what there? People in maybe deal bit you

Robert Pragada

Sure.

So about of talk start kind entirety. can maybe off then Kevin P&PS and I'll with the

We've segment ago. Andy, of P&PS, things. for number, since as in it a One off the backlog first formed by got that couple P&PS -- we let me represents is saying years record nearly timing. the So a X backlog a gross

there. of kind So X point

As bit the some we've of larger far kind got that as little the some tied drive timing the of a backlog. programs into of growth,

P&PS. Xx, over half we've of first second the month still received which of expected the going real book-to-bill backlog we're acceleration in the with in in in is quarter, some a and awards, Our see already to the

overall to Divergent? Kevin, the well talk as as you want about

Kevin Berryman

be going that of Look, transaction, and going associated Yes. change so parameter business the a technologies to it, funding considered are technology handing you're the separation, they of in best it's be part to going strategy, look, funding the is have the dynamics the I DoD with think the projects of but associated and over part was Andy. community. of Divergent, And in to right, that whereby still because the there separation forward, that responsibility utilizing and be we the probably how intelligence viable deciding were to is

starting in now, back that handing short backlog term, So intelligence -- because we community. up in term, while of DoD to, long we have being right reduction see build those a some reduction the have a well, is our now immediate over, the we're projects embedded into

the burn over next our it build in that While the into year-plus, of of longer the we'll of start that backlog is backlog delay consequently, course represents will certainly same see that to the project, come expectation up of their some to back a once have term, again. kind and burn DVS

rest outlook of and if we're when growth the I see short-term feeling our book-to-bill so when for pretty good are And those And think People & the Places. dynamics, about you over dynamics you the backlog kind the balance the of of year. X you about think those year, include

Andrew Kaplowitz

then year in helpful. costs. you allocating People I did obviously XX.X% just being good very to segment? Places? than People can you you Maybe in up the talked that you end And much sort know actually performance. did guided than about you've last trajectory margins, Places Very talk of better it better allocating how been whether about the you corporate And you're when & a &

Robert Pragada

Yes.

segments, And we to that this we Really, around those saw the growing remained we're are are rates. X double-digit so quarter, sciences, that we that Andy, standpoint, on specifically change a the nearly not think when about mix life last year-on-year from talked And So at on both are that's about a hasn't changed doubling water that mean, part, are pipeline I first -- allocation pipelines it, basis. and going it quarter, since consistent. philosophy. the

really that that driving So in is coming higher-margin mix work growth. that's of

Andrew Kaplowitz

you that though even didn't back leave. welcome Kevin, really

Kevin Berryman

Thanks, Andy.

Operator

from comes the UBS. with question Judah of next Aronovitz Your line

Judah Aronovitz

Fisher. in Steve for Calling

that First background in what guidance question the in changed the second drove has change? is, your half

Robert Pragada

you say that sorry. I'm again? Can

Kevin Berryman

the question. follow I Sorry, didn't

Judah Aronovitz

that prior what's different I expectations? the changed Yes, anything the half going in in your is guess that change? guidance sorry. second maybe on background your drove Like than

Kevin Berryman

think a at being if prudent still year-over-year in we're day, kind of No. our it feel the of I as XX% guidance, and Look, end the EPS. in we represents increase

at So quarter. first some things offsetting I saying, of think prudent result. that a We're of that. course, are know establishment the of And inventory we in we that the numbers, end, that's sitting had the we're good in it's the the in write-offs here our ending already being

a So I positive. it's actually quite think

Judah Aronovitz

is that's are what that no? question playing helpful. you in kind How about of second out Okay, is your and And to, often no you saying are and business saying project selectivity. my how projects

Robert Pragada

could And X% for focus the course selectivity it's our the that relationships. always world is, clients for we because comes water bit little We're clients opportunities transportation evaluation win work. kind is client Talk Yes. years, and And business turnover. been think and about of of for XX client a effort out about that of and has X,XXX our We've money Project had the have rates last as what the a become and in not been behind trending. Probably life experienced, that the highest, they've the around if from our long-term from component biggest over decades. put on of looking with our you around say, sciences. subjective that's we've we've you highest And now, primary that. that highest our the a market. lot the have been a us they're right increased. In

a term. there And the so long when we're we're for client, with

Operator

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

Michael Dudas

mentioned pipeline. expanded Bob, businesses, those facilities relative an to remarks data semi level life -- in and work. the I life prepared conversion and more welcome timing in back science And the some science, diversity and Bob haven't as your Kevin, maybe generally you helps. of centers, well. and The certainly

So and and might client incorporate some seeing a maybe XXXX. the maybe that you of the into projects which how through the about that bit you're work from you're can through plays second half, momentum still little about those share talking

Robert Pragada

Sure.

heard GLP-X So the life and kind about a the life mentioned I going with semi, drug. this around lot sciences Within start world, about of maybe now. Mike. our then before, that's electronics right you've world talk obesity I'll and everything sciences

at X ones in we our are space, look them you they that biggest over place. represents nearly the for capital of in If that that that put do work the XX%

So that is also One what's oncology. few happening advances quite be X big work continues around are dynamics. are is to oncology. happening There a other around driver. But a that

in on is those we're we timing so the front those last than half, of into us those. The slower a But second of over And dynamic are wanted little life quarters. right just course few jobs the capacity. last was sheer for around going the maybe well positioned and sciences

Here, capacity well. as on is choke about companies and of the world The rise talk the biotech biggest as sciences manufacturing companies point. life contract CEOs the

So around contract some good manufacturing we'll second that have QX, news here on actually in in the half, going what's space. in

from right chip of some of market now the money has a delivered is been to We're the the have in stuff chip how benefited CHIPS Act manufacturing that. also AI manufacturing Semiconductor, world not centers. data the seeing but largest ubiquitous now driving players just lot and that. The of and about news

projects we've already involved seeing about phase those. talk So of that with X been we're

of test half. test we'll you'll facilities starting and the say the assembly ecosystem And those U.S. lot and the the about it's manufacturing really second the of the and R&D semiconductor coming entirety chip And have through now But in public and to become to facilities manufacturing. assembly hear more a more from as those world, so

data So on power and X-gigawatt regards be we're in us requirements going what of on. what's creating power water cooling, data now excited for centers, opportunities to about these could usage then And centers. the the are with

So really, there. story really positive

Michael Dudas

it drive one certainly a either PA. of opportunities And the more revenue maybe growth to growth seeing looking year? with opportunity the you're on for an today? internal the And seems is get And half there profit the on my bit as more maybe at are margin. like in follow-up some macro second net along How into some is helping are you XXXX

Robert Pragada

Kevin embedded Yes. a opportunities I'll the Maybe up was is make actually What about on X% comments and the gets talk the can year-over-year. PA of backlog couple on margins. in then backlog and

collaborative so starting And of that through. momentum to those we're see opportunities those come and opportunities

a an to the We're driving of in at around election news that And be exciting of that's in pipeline So grow. the sales already drove see performance the clarity some with business. hopefully U.K. in quarter there. last lot macro there'll least the the the been year. has starting the business kind U.K. of month second the half the the And

So margin. the then talk is about will there, Kevin momentum the and

Kevin Berryman

But really industry, Mike, Yes. the to relative market. a impacting well Look, consulting in in given PA extent. team positioned, a job, think challenges I some the certain the has overall U.K. good especially done very the the which of obviously organization, right-sizing they're to is

feeling And ability be year. that the about XX%-plus margin so good we're half of in to back delivering the their

the have we we the so that in And well. And that, see translates health I do have but terms term, watch election as Not growth, PA what to think there good, carefully as and But the we so from for calendar of QX the I numbers the now our that end U.K. dynamic substantial the the right us. fiscal reported pretty execution in balance on there of year is solid have longer of year, into we're QX are. of numbers impacts enter what to visibility clear on the certainly, business. going to going look, think of

Operator

of Your Truist Cook Securities. line with the from comes next Jamie question

Jamie Cook

margins guidance? And the know backlog on year, is expecting I'm guide spoke my going we gross what's quarter. mix, half you some implied margins backlog that and of relative I where think, you with the to second your in A on to then these Kevin, year. for up, awards the questions. just I'm that on there the the are Or margin there. One in but you're couple of of question, down make Places, half just back level -- assuming don't conservatism I in any the of XXXX. being large in to were with People second of need & your just wondering awards back the

So I with guess I'll start those.

Kevin Berryman

just we're let me because of than a us quarter associated margin first XX.X% the I Well, a to profile, that it quarter. start one. with cost last a feeling on saw think don't we quarter. consequently, factors today that can going I & mix Look, is is as the better high I And think and particular we People Places say level. record, think felt we at every about actually about during XX.X% our is hit of assume be what will that we

at going So perspective. darn to I that the think QX from in end we're It can are pretty and be we're year attractive. it but that going characterize QX, doesn't going hit XX.X% I to mean numbers to

Robert Pragada

P&PS. And the looking of I guide, feeling when guide pipeline. the robust probability awards, then of just award. weighting guide pipeline in about they are for part part not the -- but the optimistic the anticipated our But on we're or extremely not say the award, is are incorporates awards, a The Jamie, those

Operator

Your Sangita next question Capital of line Jain from Markets. with KeyBanc comes the

Sangita Jain

scaling be just the on of Saudi seems back I to project. and NEOM So wanted ask parts Kingdom Arabia, to the about

exposure what might are just look your like. I what guys there wanted hearing and hear So you to

Robert Pragada

Sure.

provide programs. you then maybe the value-added type talk or Broadly, us, So look in if a towards a to We've pipeline the as specific as I'll of broadly, offering. these continues. we of pipeline. the robust. rail work don't infrastructure and had well services just Saudi, pipeline, at be specifically index the it, that on it's have entire component the it for the life water about aviation pretty in cycle whether we've of diverse And been got NEOM. opportunities And of Saudi, that We transportation,

water major we're Airport expansion that's place. announced as just new force Riyadh of putting a in on going as that in we the So the well full that's infrastructure

as going the on XXX for continues Our the pullback dedicating we're to that's not on exposure right towards job the that as the has the with job on schedule even we far now has the and not on the as just NEOM, not in but ours work go well. growth -- see NEOM personnel abated that kilometers,

Sangita Jain

if a helpful. transmission, super lot And bit your gave and on renewables. in of seeing key there you and us you be can U.K. power, end a just the as rundown the here ask, markets I That's what on power a as well of may Maybe little markets. and energy

Robert Pragada

Sure.

place the additional an it's U.S., but the been on have also of of middle So overall, that been and Zealand kind that we solid. the a in not there. I'd it's Southeast Europe, interconnectors just pursuits by New Asia, on the that impact in some in in that Europe, transition, in it's in driven but market Australia, The kind we work The tailwinds geopolitical put we're both and of just say market. had its own in not seeing enabling Europe, are, clearly energy that continues.

expertise probably areas expertise in and and the Our that taking energy U.S. taking EV ecosystem as with the of such renewables been and to focus regards it to level then centers around a transportation, data greater that's

that skill energy doubled group off the size So just of have. and a in year. diversity it sets a it but power smaller Again, that kind from base is really in helping we of started our

Operator

the from Bernstein. question Dillard Chad line with of comes Your next

Charles Albert Dillard

that talked prepared down. the about remarks, just legislation your PFAS handed in So you was

talk backlog. there? is for the design you can about to trying that? sense Like in a win cycle for to for Just also how positioned awards get to think what's about potential And then how your Jacobs timing

Robert Pragada

Yes.

across markets. probably $XXX you the next end the multiple course kind billion spans this Chad, heard of of that years, is XX So that over before, the

Air line so and The of $XXX the And that PFAS, well see a the that's as is Force to part within up as way us -- to we as that DoD to annual more of bigger the $XX offering. What kind specifically PFAS of direct as probably see the law. the as over pursuits, the Corps of agencies, period piece time showing time Navy a is million in individual DoD, of revenue continue long you and can which don't and water. Engineers, more regulations for become drinking million of it's an in

the a it reclamation so offering PFAS be -- continues a that to consulting the grow. we remediation within PFAS or water that And whether within treatment that and do wastewater or project, work water

cloudy, see for And said this to it. critical a the as of at we've these scope is to we're on on our an for of is these So like I existing and it to that growth look a as part little work continue time but incremental a how looking to a had long going be clients offering. question, be kind are will at first catalyst are,

Charles Albert Dillard

evolving? And be on specifically color quarter That's helpful. you that helpful. talk your then over transportation. on changed Any infrastructure side, just about ago? would on year it is Has Can like pipeline the how maybe this a versus

Robert Pragada

of probably that's more U.S. is the in and come through indexed you've focus that the towards awards. in growth what's our Pipeline Sure. some there, IIJA seen

work in we're quarter, areas we highways digital opportunities in that growth that within And transport. I'd to that the is amongst rail our we and creating about not us talked coming well, growth would competitive in Australia then just comes our we're clients East as that the but could what's be more how that for value then differentiating those about grow. the stability last So The with is more I'd U.K. Middle there's -- our say this platforms. continuing see our quarter, pool, the say we in in talked continued larger enabling And U.K., the as the seeing continue.

but cases not the of So East revolutionizing the it to But work own the the about Australia. soon our in offering in how we're got starting in is to as just Data now Middle StreetLight come of use U.S. our well in use in U.K. come clients see to both embedded that and kind that's almost we've firmly something as

Operator

of the from comes question Justin next with Your Baird. line Hauke

Justin Hauke

back of the CMS year, about first of think little half talking on some just a losses mid-single-digit a The previously constant that the going half. the It's I think are kind I guys pressure talking to half, rate. clarify second were currency I wanted program thing in were you bit but -- below the for guidance. growth to the about one I outlook you

that And the to and half sure we wanted so back what at growth your CMS. of I revenue make kind the year in what understood that just expectations are the commentary for of meant

Kevin Berryman

impacts, have did we the I that would term a Justin, I short-term somewhat and QX, short sizable, was one call Yes, would QX. which say, loss,

lot a in seeing are that, probably of offsetting of and run, mitigating that have growth be to the fundamentally of awards opposed While the to as gap, it digits. filling us more short-cycle flattish single the mid-single the we short impacts in digits, puts

and positioning remind least at filling XXXX. in the think I QX, that XXXX, over. in putting back tell So I transferred that's growth amazing going to be as an you But in job QX. I is you be the seeing in is in incremental for itself would the a business doing dynamic would this that place exiting to team is

Robert Pragada

as to now add. what has for line mentioned quarter operational highest we've quarter we we're another last is team real the that it that the The growth bottom seen one just highlight thing efficiencies margins double-digit that operating maybe are the CMS. within and doing delivered this in really well, for business with And that through,

Kevin Berryman

team margin that's one good front. the a the be really Bob, nice this profile, shouldn't on But And on has a because margin we're we discussing seeing though even point, impacts done the item. job

Justin Hauke

X one Okay. that of rate with the The to quarters, post come that's that's item trending separation step it? down $XX about ask kind costs. the think 'XX? to line kind million, balance of So And expecting down I this the function the guess $XX right? still the you last to when spin, like though, not of quarter kind And to then would you're corporate expect of unallocated the until million the for change the you've just run on first right year. is in of that Is my that way the second had the

Kevin Berryman

That's correct.

Operator

comes from Subin question next Stifel. with line Your the Bert of

Sahej Singh

of ramp. Sahej about I like is asked, lot ask been This Bert. will have for a IIJA good Seems on so questions

expectation Are color more that you IIJA the trend? and heard of be to industry Any guys expected? we've seeing would an think from around funding trend commentary even of for you I then you seeing XXXX. faster broadly helpful. still or Are that ramp than 'XX there

Robert Pragada

but what But not that but later like talked was still it's really IIJA. I right 'XX, could anticipated. what trending now, down because it because awards of not that, kind by year, last for awards new it that's 'XX, the No, to the half trend those we've we've mentioned but that. just quarter today, on about being also telegraphed the of flows, it's slowing The be we've it's than extended that started second are that and catalyzed these how think looks money

Sahej Singh

helpful. related follow-up maybe on a then That's to prior the question expenses. And unallocated

into You've spin. post the given good visibility

the as at math, a I sales. it was you're think I quickly trending on X% look at about trailing I doing XX-month

trailing looking been XX-month it's on post spin, elevated get? PA a acquisition you your I basis in post maybe to So percentage where 'XX? Consulting are think

Kevin Berryman

look, percentage. we're the we've absolute communicated. targeting that of moving have just not to don't lot I which want targeting highlight. in an pieces number a a Well, which We're There's I --

organization. is conveying Part the is we're from TSA be to of infrastructure to our revenue of going cost going will example, we There new For period. transition that conveyed. receive the be corporate

$XX going be side the has end it's expended there's want that reinforce the to at but that effective the the And you impacts we're stand-alone focus that. And moving going numbers. be And it to ensuring XXXX. think inconsequential. at this million can't end how organization, as against which day to of the to, Got management now number and to a level safe the getting separation a of jobs lot creating pieces, service a day teams, standup to ability of I accelerate is to into look, of of I proud say of net day, the execute its of of their but relative to that go that that's away to that's at on support So the the is not look office those able rest short-term from the I just given we're be separation. that reduce actually not lot to targeting because number government tell for to the us effort to day further to we pulled I pleased actually dedicated help entity and being able am relative are the company be its only in X, to that amount work right growth,

really it. we're about So feeling good

Sahej Singh

And you then Airport. just is the last one Riyadh for me mentioned

I as on color in potentially you think are guys project actively Any in around? flow Dubai pursuing I be saw some airport. tailwind interested Middle helpful and/or are East there into the conversations their region a would expanding that incrementally news Is a more that specifically.

Robert Pragada

yes. transportation, a It's infrastructure Dubai been within be multifaceted on we've that our focus reaching there for East. a within the presence Yes and will and work, decade, for us of water, area in primary aviation and Middle is to transportation -- continue

yes. is answer the so And

Operator

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

Jerry Revich

to for What CapEx the When centers I spoke, Bob, scope data like data you, for you lower. center the and equipment center if XX% market just CapEx of your probably outlook folks data I'm know, wondering last talk the we share? compared you was, folks. does for semi-cap could about don't opportunity looks for

on could if is similar So for it for centers to your wondering you data as I'm equipment? growth outlook actually semi-cap accelerate facilities, think the advanced content is what remotely about the

Robert Pragada

is is of Jacobs. manufacturing delivery at a deployed a profile centers chip the call put and -- to chip electronics the share of Yes. perspective billions a -- not a of Jerry, then cycle just minority is you the data the of as capital percentage this the it just get percentage it It into from if market. that kind universe, of look entire of life

of needs But growth centers what's and the the business. So of one. point that's really is by data driving rate these driven AI kind for our

we see growing. that So

needs, From not more the the overall real facility these power a the needs. complicated needs component. are What's water design complicated the are not becoming cooling and -- perspective, pure the is itself

really So focused that's in are what our on. teams

proposition others seen it's value some we that's Schneider But probably and talk into Eaton driving going of bigger power and power You've companies, there. their of how into centers. how management the that the going piece usage and is water kind be about to hardware that of consultancy piece, that business bigger the a data goes expand

Jerry Revich

which mentioned Can And there's in us just really coming Places, of line within of the end up. some were top terms People bookings in end & markets expect quarters? your good backlog you and you of And to calibrate drivers you the average bookings, what's growth biggest in of next segment above the which do based quarter? on couple be over markets and growth growth

Robert Pragada

sciences. when P&PS Water time, before, even and in over represents that that's right look now, probably and we moving that rates, doubling point as in life far I are, that the global. pipeline as Those mentioned pipelines X then are XX% as QX, size, forward, the those growth. at And of at

if in water U.K., in course, So been areas Australia too. geographies, both as that's of that's bookings you as some those such growth the the a and in And in might geoeconomic well at U.S. the Middle have challenges that East, look and the growing. the water driver as

and Europe sciences, life U.S. globally. So Water

Operator

line from Josh question next Company. of Benchmark the comes with The Your Sullivan

Joshua Sullivan

maybe hot? a just retention a on Can on Where labor getting availability, is you Where better? is still it basis? comment little inflation geographic it

Robert Pragada

these it's not capital ability but at on hot continue we changed wage that solutions a from consultancy Yes, there, larger as us, point all clients or far platforms. deployment programs, innovate space. What's drives in our model. If still engagements our how of look we our to the can with delivery has and to be Josh, continue that our that have, really global -- we they'd at And from all over. as clients value-added price for delivery as over engagements deliver people the smaller inflation, it's has whether kind literally clients, jobs been engagements look global and have our at to really our helped that these looking we got we

arbitrage, literally the not with outcome, and that -- we it's it's that and that every necessarily so the is talent be our might to but talent have geography an in And we're cost today. going continue arbitrage because

So big not issue for been really it has a us.

Joshua Sullivan

wins were opportunistic? focus in shift the that Any in comments on just then just where there, you And specifically the short-cycle mentioned those? is or structural

Robert Pragada

been telecom, some work probably weapon sustainment, as and in focused around well. then It's our aerospace we No. that growth see scope

Operator

session, That the turn and for concludes to question-and-answer will Pragada I Bob over back our conference now remarks. closing

Robert Pragada

and Thank forward of call. all you, in look the and you our to look earnings months and everyone, you, forward to to with Thank and for We everyone. come, updates providing really investors visiting joining further firsthand. analysts engaging

Operator

conference for you may today's Thank disconnect. you and your concludes participation, call. now This

Jacobs Engineering (J) 7 May 242024 Q2 Earnings call transcript