Jacobs Solutions’ second quarter results were well received by the market, as the company delivered higher non-GAAP earnings per share despite missing Wall Street’s revenue expectations. Management attributed the quarter’s performance to robust growth across advanced facilities and water sectors, as well as an expanding backlog fueled by strong demand in life sciences and data centers. CEO Robert Pragada highlighted the company’s ability to secure large, multi-year projects and noted the successful application of digital twin technologies, especially in collaboration with partners like NVIDIA, as key drivers of operational efficiency and client wins.
Is now the time to buy J? Find out in our full research report (it’s free).
Jacobs Solutions (J) Q2 CY2025 Highlights:
- Revenue: $3.03 billion vs analyst estimates of $3.06 billion (5.1% year-on-year growth, 0.9% miss)
- Adjusted EPS: $1.60 vs analyst estimates of $1.54 (4.4% beat)
- Adjusted EBITDA: $314.3 million vs analyst estimates of $314.3 million (10.4% margin, in line)
- Adjusted EPS guidance for the full year is $6.05 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 7.8%, up from 5.9% in the same quarter last year
- Backlog: $22.69 billion at quarter end, up 14.3% year on year
- Market Capitalization: $17.91 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Jacobs Solutions’s Q2 Earnings Call
- Sangita Jain (KeyBanc Capital Markets) asked about the nature of data center project scope expansions. CEO Robert Pragada explained that Jacobs is now involved across design, power, water, and full project delivery, citing the NVIDIA partnership as “transformational.”
- Andrew John Wittmann (Baird) inquired about the impact of recent government funding bills on the business. Pragada described net positive effects, especially for Department of Defense and FAA projects, but acknowledged uncertainties in state and local allocations.
- Andrew Alec Kaplowitz (Citigroup) sought more detail on the confidence behind next year’s growth outlook. Pragada pointed to multi-quarter backlog strength in life sciences, data centers, and water, with Nathamuni adding that visibility is supported by recent wins and pipeline strength.
- Sabahat Khan (RBC Capital Markets) asked about the effect of IIJA funding flow and future allocations. Pragada responded that only a third of the bill has been spent so far, and diversity in Jacobs’ portfolio lessens dependency on federal timelines.
- Kevin Samuel Wilson (Truist Securities) queried about differences in water and environmental sector performance. Pragada noted that water is currently outperforming long-term targets, while environmental is expected to rebound as regulatory environments stabilize.
Catalysts in Upcoming Quarters
In upcoming quarters, our team will be watching (1) the conversion of record backlog into revenue, especially in advanced facilities and water, (2) further margin improvement through operational efficiencies and digital initiatives, and (3) continued momentum in PA Consulting and data center project awards. Progress in deploying digital twin technologies and the impact of government infrastructure funding will also be important indicators.
Jacobs Solutions currently trades at $151.37, up from $140.05 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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