No bad stock

Jacobs Engineering Group Inc.
CEO : Mr. Robert V. Pragada

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2023 Q1	12.4% YoY	34.1%	2.9%	2023-02-07

Kevin Berryman says,

Financial Overview

• First quarter gross revenue grew 12% YoY
• Net revenue grew 8% YoY
• Adjusted gross margin in the quarter as a percentage of net revenue was 26%
• Adjusted G&A as a percentage of net revenue was 15.5%
• Adjusted operating profit was $332 million, up 8% YoY and 15% YoY on a constant currency basis

People & Places Solutions

• Q1 net revenue was up 8% YoY and up 13% in constant currency
• Backlog grew 2% YoY
• Gross margin and backlog was up double digits in constant currency
• Operating profit as a percentage of net revenue was 14.5%, up over 140 basis points YoY
• Q1 operating profit up 20% YoY and 28% in constant currency

Critical Mission Solutions

• Q1 revenue was up 10% YoY and up 13% in constant currency
• CMS book-to-bill ratio was just over 1 times
• Operating profit was $82 million, down 10% YoY and down 6% on a constant currency basis
• Operating profit margin was in line with expectations and was down 170 basis points YoY to 7.6%

Divergent Solutions

• Gross revenue was up 11% YoY, and when excluding the impact from pass-throughs, net revenue increased 7% YoY
• Operating profit margins were 6%
• Expect net revenue growth to accelerate materially in the second half of fiscal year

PA Consulting

• Revenue from PA was down 3% YoY in USD but up over 11% in British pounds
• Q1 operating profit margins were 18%
• Expect margins to improve incrementally approaching 20% as we exit the fiscal year

Cash Flow and Balance Sheet

• Free cash flow was $270 million and included an outflow of $60 million for payment of the CARES Act deferral benefit of payroll taxes and $6 million related to transaction costs and other items
• Excluding the unusual payment associated with the CARES Act, underlying free cash flow for the quarter was a very strong $330 million

Bob Pragada says,

Revenue and Performance

• The People & Places Solutions line of business showed a strong performance with net revenue up 8% YoY and operating profit up 20% YoY.
• CMS delivered a strong base of recurring revenue with a growing new business pipeline, and strong tailwinds and backlog growth are anticipated moving forward.
• PA Consulting experienced lower-than-expected utilization, but double-digit top-line and backlog growth were achieved.

Key Priorities

• The company will maintain an inclusive and inspirational culture, with a focus on driving a higher structural growth rate across core sectors through climate response, data solutions, and consulting and advisory.
• Long-term returns for shareholders will be delivered by driving further operational discipline across the business to accelerate cash flow generation with disciplined capital allocation.

Sustainability and ESG

• The company’s commitment to sustainability is core to its strategy, and its significant performance is being recognized by many of the top ESG accredited institutions.
• Jacobs was included in the 2022 Dow Jones Sustainability World Index, ranking the company among the world’s leading companies with outstanding sustainability performance.

Growth Sectors

• Jacobs is focused on four key growth sectors: critical infrastructure, energy and environment, advanced facilities, and national security.
• The Infrastructure Investment Jobs Act (IIJA), the Inflation Reduction Act, and the CHIPS Act are driving growth in the infrastructure and energy markets. Jacobs has helped its clients secure over $1 billion in IIJA competitive grants since its passage.
• Jacobs continues to see sustained capital investment in the semiconductor manufacturing space, biotechnology capacity expansions, and the electric vehicle ecosystem, all being driven by reshaping of global supply chains, technology advancements, and decarbonization efforts.
• Increased defense spending in the US, UK, and Australia due to global threats is driving growth in national security.

Financial Results

• The company’s underlying business remains strong.
• Jacobs expects to have all three bills (IIJA, Inflation Reduction Act, and CHIPS Act) firing at full strength and funding critical projects sponsored by local governments, the federal government, and the semiconductor industry before the end of the calendar year, overlapping spending for four to five consecutive fiscal quarters and driving growth across the infrastructure and energy markets.

Q & A sessions,

Financial Outlook

• Reiterates outlook for FY 2023 adjusted EBITDA of $1.4 billion to $1.48 billion
• Reiterates outlook for FY 2023 adjusted EPS of $7.20 to $7.50

Growth Accelerators

• Climate response, data solutions, and consulting and advisory are three needle moving growth accelerators
• Executing against these accelerators will structurally increase long term earnings power

Strong Performance

• People & Places Solutions net revenue up 8% YoY (13% in constant currency)
• Operating profit up 20% YoY (28% in constant currency)
• CMS delivers strong base of recurring revenue with growing new business pipeline
• PA Consulting experiences double digit top line and backlog growth with strong demand and robust opportunities in sales pipeline

Growth Sectors

• Four key growth sectors: critical infrastructure, energy and environment, advanced facilities, and national security
• Driven by federal government stimulus from IIJA, Inflation Reduction Act, and CHIPS Act, supply chain and technology investments in advanced facilities, and increased global threats in national security
• Industry position continues to grow in these sectors with double digit pipeline growth

Commitment to Sustainability and Culture

• Sustainability is core to the company’s strategy and has resulted in inclusion in 2022 Dow Jones Sustainability World Index
• Commitment to culture transformation with emphasis on inclusion and diversity, which has been a critically important contributor to success and provides a key differentiator in attracting and retaining talent and driving innovation for clients