Jacobs fiscal third-quarter adjusted EPS rises 13.6% to $1.84; backlog a record $28.9 billion

Jacobs Solutions Inc. (NYSE: J) is a Dallas-headquartered global professional-services and design / consulting–weighted firm—approximately $12 billion in annual revenue and roughly 47,000 people—providing advisory, consulting, feasibility, planning, design, program and lifecycle management across advanced manufacturing, cities & places, energy, environmental, life sciences, transportation and water. (successor issuer to Jacobs Engineering Group Inc. after the August 2022 holding-company reorganization). Continuing operations report two segments: Infrastructure & Advanced Facilities (I&AF) and PA Consulting (100% owned since the March 20, 2026 close of the remaining-stake transaction). Critical Mission Solutions / Cyber & Intelligence sit in discontinued operations after the September 2024 separation into Amentum.

Backlog, book-to-bill and pipeline are contracted-work / pursuit visibility. Last print: August 4, 2026 fiscal third-quarter results for the period ended June 26, 2026 (Jacobs IR / Exhibit 99.1 earnings release; Form 10-Q accession 0001628280-26-052573 filed the same day; earnings call webcast August 4, 2026, 4:30 p.m. ET). Headline continuing-ops: gross revenue $4.076 billion (+34.5% YoY); adjusted net revenue $2.417 billion (+8.3%); GAAP net earnings from continuing ops $137.4 million / diluted EPS $1.16 (GAAP tax temporarily elevated on the PA transaction); adjusted EPS $1.84 (+13.6%); adjusted EBITDA $366.8 million (+16.7%), margin 15.2%; record backlog $28.9 billion (+27.3% YoY); Q3 OCF $456 million. Nine-month gross revenue $11.065 billion. Jacobs headlines free cash flow and adjusted free cash flow (and guides adjusted FCF margin).

Thesis: whether a post-CMS, fully owned PA Consulting Jacobs—I&AF organic growth in data center / semiconductor / energy & power / transportation / water, plus consulting leverage—can convert a record $28.9 billion backlog, raised fiscal 2026 midpoints (third consecutive raise), and adjusted FCF into durable adjusted EPS and cash returns, without treating backlog, AI-infrastructure mix or named EPCM awards as offtake.

Headline P&L (continuing operations) (Q3 fiscal 2026; $ thousands except per-share data): Gross revenue 4,076,410; Adjusted net revenue 2,416,608; Gross profit 810,703; Operating profit 286,703; GAAP NI attrib. Jacobs (continuing) 137,359; GAAP diluted EPS (continuing) $1.16; Adjusted net earnings (continuing) 219,263; Adjusted diluted EPS $1.84; Adjusted EBITDA 366,809; Adjusted EBITDA margin (on adj. NR) 15.2%. Gross revenue jumped 34.5% on a large rise in pass-through procurement (pass-throughs $1.660 billion in Q3 vs $800 million a year earlier)—read the business on adjusted net revenue (+8.3%, all organic in I&AF per management). GAAP EPS compressed on a temporarily higher tax rate tied to the PA acquisition; compare on adjusted EPS / adjusted EBITDA. This is a professional-services / design–EPCM P&L—higher adjusted EBITDA margins than Fluor’s thin consolidated segment margins, but still services economics, not specialty-craft contractor gross-margin math.

Two reportable continuing segments after the CMS/C&I separation. Segment mix (current labels) (Q3 fiscal 2026 gross rev): Infrastructure & Advanced Facilities $3,747M; PA Consulting $330M; Total / consolidated $4,076M. I&AF (~92% of Q3 gross revenue; ~86% of adjusted net revenue): Segment gross revenue +39% YoY; adjusted net revenue +10%, all organic per CEO Bob Pragada. Life Sciences & Advanced Manufacturing led (+24% adj. NR YoY—highest disclosed since late-2024 end-market reporting); critical infrastructure +9% (energy & power double-digit on U.S. T&D). Water & environmental only ~+1%, environmental still soft YoY but book-to-bill >1.3x on PFAS / DoD / private industrial—management expects sequential Q4 improvement and a return toward prior growth in fiscal 2027. Pass-through intensity sits in I&AF (PA has none)—volatile gross revenue is not fee growth.

PA Consulting (~14% of Q3 adjusted net revenue): Revenue roughly flat YoY in Q3 ($329.5 million vs $332.7 million); segment operating profit $73.6 million (~22%+ operating margin retained). CFO Venk Nathamuni flagged temporary U.K. government project-start delays after a leadership change, with conditions normalizing and solid sequential Q4 revenue growth expected. Cost synergies from full ownership are now guided at at least $20 million per year within 24 months of close (vs $16 million–$20 million at announcement). Nine-month PA revenue $1.043 billion (+10% vs $947 million). PA is advisory / consulting exposure to I&AF delivery—not Fluor Mission Solutions, not specialty craft. Q3 growth was organic I&AF execution plus mix, not a specialty-contractor bolt-on narrative. The March 20, 2026 PA remaining-stake close (~£1.2 billion upfront consideration; implied EV ~£3.05 billion; £75 million deferred to the second anniversary) eliminated redeemable NCI and added interest / compensation noise—portfolio completion.

Cash flow (Q3 fiscal 2026; $ millions): Operating cash flow 456.1; Additions to property & equipment (25.1); Company FCF (OCF − capex, defined) ~431; PA-transaction employee payouts (add-back) 109.9; Adjusted free cash flow (company) 540.9. FCF: Jacobs defines free cash flow as OCF less additions to property and equipment and defines adjusted FCF as FCF excluding employee-related payments that were part of initial PA transaction consideration; it also guides adjusted FCF margin (~8% of adjusted net revenue for fiscal 2026). Q3 adjusted FCF $541 million and 9M adjusted FCF $633 million are the labeled cash metrics alongside the $456 million Q3 OCF highlight.

Balance sheet, capital allocation and portfolio shape (June 26, 2026; Balance-sheet items ($ millions)): Cash and cash equivalents 1,173; Receivables and contract assets 3,761; Goodwill 4,756; Long-term debt 3,579; Jacobs stockholders’ equity 3,264; Shares outstanding (approx.) 117.1M. Long-term debt rose with financing for the PA buy-in; redeemable NCI was extinguished at close. Management said net leverage fell to 1.8x, below the year-end <2.0x target a quarter early, with a path toward ~1.5x by end-fiscal 2027. Capital returns: $142 million of share repurchases in Q3 and $614 million year-to-date; $1.4 billion of buybacks since the start of fiscal 2025; dividends $42 million in Q3 / $123 million YTD. Including dividends, the company said it is on track to return more than 100% of free cash flow to shareholders for a second consecutive year—capital-return framing.

Jacobs was ranked first by ENR in 18 categories, including data centers (up six categories YoY)—industry ranking color, not backlog conversion.

Backlog / book-to-bill / pipeline (visibility): Company backlog $28.888B as of June 26, 2026; vs June 27, 2025 $22.690B (+27.3%) — Record; I&AF $28.429B / PA $0.459B; Q3 book-to-bill (gross) 1.5x (TTM 1.4x); Q3 adj. NR book-to-bill 1.1x (TTM 1.2x); Net revenue / GP in backlog +11% / +14% YoY (call); Direct AI infrastructure mix ~11% of adj. NR (was ~10% prior qtr); Data-center backlog / pipeline color Backlog ~doubled; pipeline ~3x; visibility out 2–3 years (call). Backlog / book-to-bill / pipeline = visibility. Company backlog definition (annual report / MD&A): revenue or gross profit expected to be realized for work by consolidated subsidiaries and proportionate unconsolidated JV share—subject to cancellation, funding and scope change. Pass-throughs can inflate gross book-to-bill; prefer adjusted net revenue book-to-bill for fee quality.

Named awards disclosed on the call / IR: sole-source EPCM for Hut 8’s Beacon Point AI data-center campus in Texas (multiphase campus designed to support 1 GW total capacity; initial energization targeted 2027; follow-on to Hut 8 River Bend program delivery in Louisiana)—named client and EPCM scope. Other Q3 color: U.S. Navy Environmental Restoration (Mid-Atlantic / Puerto Rico) program management; Central Utah Water Conservancy District Strawberry High Line (part of ~$1.5 billion Nebo Regional Water Project); environmental private industrial and PFAS / DoD work. Labeled KPIs: gross revenue / adjusted net revenue; GAAP and adjusted EPS; adjusted EBITDA and margin; segment OP (I&AF / PA); OCF and (adjusted) FCF / FCF margin guide; backlog and book-to-bill (gross and adj. NR); net leverage; capital returns.

Jacobs raised fiscal 2026 midpoints for the third consecutive quarter: Guidance and outlook (Updated fiscal 2026 guide): Adjusted net revenue growth vs fiscal 2025 9.5%–10.0%; Adjusted EBITDA margin 14.7%–14.8%; Adjusted EPS $7.20–$7.30; Adjusted free cash flow margin ~8%. Call bridge for Q4: ~14% YoY adjusted net revenue growth; adjusted EBITDA margin ~16%; tax rate near 27.5%; ~$150 million free cash flow. Midpoint of the raised Adj. EPS band implies nearly ~19% YoY adjusted EPS growth per CFO. Management deferred quantitative fiscal 2027 guidance to the next call but said backlog supports growth at least aligned with the company’s previously stated long-term average. GAAP reconciliations for forward Adj. EBITDA margin / Adj. EPS / Adj. FCF margin are not provided without unreasonable effort per company practice—prefer labeled non-GAAP bands over Street “beat/miss” narratives.

Material items after the August 4 print (or still live into the week-of): MetroLink Program Delivery Partner (Sept. 10, 2026 IR): Jacobs–AECOM joint venture appointed by Transport Infrastructure Ireland as Program Delivery Partner for Dublin’s MetroLink. Visibility / PM role; AECOM appears here only as JV counterparty. Oklahoma City wastewater O&M (Sept. 10 IR): Selected by Oklahoma City Water Utilities Trust for wastewater facilities and solids-management O&M under a ~5.5-year contract, expanding Jacobs’ water O&M footprint. MESH Energy Storage Hub (Sept. 8 IR): Selected by EnergyPathways plc for consenting / DCO work on the Irish Sea / Barrow-in-Furness MESH long-duration storage project (300 MW / 55 GWh design color; CAES + gas / future hydrogen; ops target 2031 subject to consents and financing), plus Ofgem Cap & Floor and grid-connection support. Consenting / regulatory visibility. National Grid Asset Health Intervention Programme (Sept. 23 IR): Reappointed and expanded (Central / SE / SW U.K.); five-year detailed design, design assurance and construction support valued at more than $13 million (£10 million) across 800+ transmission assets. ENR rankings / Q3 award carry: Ranked first by ENR in 18 categories, including data centers (flagged in the Aug. 4 release).

Form 4 / capital returns: Chair & CEO Robert V. Pragada Code P buy of 3,601 shares May 15 at WA $111.09 (~$400k; holdings 333,755)—pre-print alignment color. CFO Venkatesh Nathamuni had 1,803 shares withheld to cover taxes June 3. Buybacks continued through Q3. Jacobs’ Hut 8 Beacon Point work spans EPCM, digital modeling and program delivery. Direct AI infrastructure work was about 11% of adjusted net revenue in Q3, and PA Consulting kept a segment operating margin above 22%. (Jacobs IR Q3 fiscal 2026 earnings release, Aug. 4, 2026; Aug. 4 earnings call).

Post-print Form 4 flow is light. The substantive signal remains Pragada’s May 15 Code P buy (3,601 shares)—alignment color, not a thesis.

Risks: (1) Pass-through volatility and working-capital timing—gross revenue and receivables can move without fee-quality improvement; 9M OCF ($353 million) still trails Q3’s catch-up. (2) PA Consulting U.K. public-sector timing and synergy delivery vs the ≥$20 million / 24-month target. (3) Environmental end-market still soft YoY despite book-to-bill repair. (4) Elevated interest expense and leverage after the PA buy-in until the ~1.5x fiscal 2027 path lands. (5) Tax / transaction noise—GAAP ETR spikes can obscure run-rate. (6) Public-sector funding, IIJA / budget priority shifts, tariffs and geopolitical risk called out in the release FLS. (7) Data-center / AI mix concentration (~11% adj. NR) and selectivity vs speculative pursuits. (8) Litigation / JV matters historically material (e.g., Consolidated JV Matter reserves in prior periods)—watch 10-Q contingencies.

What to watch into Q4 / fiscal 2027 print: Q4 adj. NR ~14% and ~16% Adj. EBITDA margin delivery; fiscal 2026 exit inside raised bands; backlog book-to-bill (gross and adj. NR); AI-infrastructure mix trajectory; Hut 8 Beacon Point / River Bend execution cadence (energization 2027 target is schedule color, not offtake); MetroLink task-order ramp and any Irish government construction FID path; PA sequential recovery and synergy capture; buyback / dividend vs >100% FCF return framing; net leverage vs 1.5x fiscal 2027 ambition; any further named advanced-manufacturing awards only as disclosed.

Near-term path is guide delivery and backlog conversion: fiscal 2026 adjusted net revenue growth inside 9.5%–10.0%, Adj. EBITDA margin 14.7%–14.8%, Adj. EPS $7.20–$7.30, and ~8% adjusted FCF margin, with Q4 framed at ~14% adj. NR growth and ~16% Adj. EBITDA margin. fiscal 2027 growth, if it comes, is tied to disclosed backlog quality, AI-infrastructure and life-sciences / advanced-manufacturing mix, PA sequential recovery, and post-print PM / design wins (MetroLink task orders, National Grid, MESH consenting, Oklahoma O&M)—still subject to client FID, funding, scope and cancellation. Sources: Jacobs IR Q3 fiscal 2026 earnings release (Aug. 4, 2026); Form 10-Q for quarter ended June 26, 2026 (accession 0001628280-26-052573); Aug. 4, 2026 earnings call highlights / transcript color; Jacobs newsroom—MetroLink PDP JV (Sept. 10), Oklahoma City wastewater O&M (Sept. 10), MESH Energy Storage (Sept. 8), National Grid Asset Health (Sept. 23), PA Consulting remaining-stake close (March 20/23, 2026); Form 4s (Pragada May 15/18, Nathamuni June 3/5).