Key Highlights

● Gross revenue rose 34.5% to $4,076.4 million.

● Adjusted net revenue rose 8.3% to $2,416.6 million.

● Backlog reached $28.9 billion, up 27.3%.

● Adjusted earnings per share rose 13.6% to $1.84.

Jacobs Solutions Inc. (NYSE:J) reported fiscal third-quarter 2026 results on 4 August 2026, for the quarter ended 26 June 2026. Gross revenue rose 34.5% to $4,076.4 million, and adjusted net revenue, the measure the company emphasises, rose 8.3% to $2,416.6 million. Backlog reached $28.9 billion, up 27.3%, and Jacobs raised the midpoints of its fiscal 2026 guidance for the third consecutive quarter.

Business and Sector

Jacobs provides professional services in engineering, consulting, project delivery and technical advisory work for governments and companies. Its Infrastructure and Advanced Facilities business serves markets including data centres, semiconductors, energy and power, transportation and water, and the company has added consulting capability through its acquisition of PA Consulting.

Engineering services demand is supported by public infrastructure programmes, energy network investment and private spending on advanced manufacturing and digital infrastructure. Jacobs said Engineering News-Record ranked it first in 18 categories, including data centres. Because projects are delivered over several years, backlog is a key indicator of future activity.

Latest Results

Infrastructure and Advanced Facilities gross revenue grew 39% organically, and its adjusted net revenue rose 10% organically, led by data centre, semiconductor, energy and power, transportation and water work. Book-to-bill, the ratio of new orders to revenue, was 1.5 times on gross revenue for the quarter and 1.4 times over the trailing twelve months. On adjusted net revenue it was 1.1 times for the quarter and 1.2 times over twelve months.

GAAP earnings were $137.4 million, or $1.16 per share, compared with $181.2 million, or $1.56. Jacobs attributed the decline to a temporarily higher tax rate linked to the PA Consulting acquisition, with a GAAP effective tax rate of 43.4%. Adjusted earnings per share rose 13.6% to $1.84 from $1.62, with an adjusted tax rate of 26.4%. Adjusted EBITDA was $366.8 million, up 16.7%.

Financial Performance and Industry Context

Operating cash flow was $456.1 million in the quarter. Jacobs repurchased $142.2 million of shares in the quarter and $614.1 million year to date, and paid $42.2 million in dividends. Net leverage fell below the company's year-end target.

For fiscal 2026 the company now expects adjusted net revenue growth of 9.5% to 10.0%, compared with 8.0% to 10.5% previously. It guides to an adjusted EBITDA margin of 14.7% to 14.8%, adjusted earnings per share of $7.20 to $7.30 and an adjusted free cash flow margin of about 8%. These are forecasts.

Gross revenue grew far faster than adjusted net revenue, which excludes pass-through costs.

Risks and Uncertainties

Jacobs relies on large contracts with governments and corporate clients, and project timing, funding decisions and permitting can shift revenue between periods. Growth in data centres and semiconductors depends on continued private capital spending, which may change if technology investment slows.

Acquisitions add integration and accounting complexity. The higher GAAP tax rate attributed to PA Consulting reduced reported earnings, and the company describes it as temporary, which means GAAP and adjusted results may continue to diverge.

Pass-through revenue, which raises gross revenue without adding as much profit, can also make headline growth look stronger than underlying growth. Cost inflation, labour availability and fixed-price contract risk are further considerations in engineering and construction services.

Backlog conversion and the tax rate

Jacobs reported strong order intake, rising adjusted earnings and a raised outlook, alongside lower GAAP earnings due to tax effects. Developments to watch include fiscal fourth-quarter and full-year results against the revised guidance, conversion of backlog into adjusted net revenue, the evolution of the tax rate, continued demand from data centre, semiconductor and energy clients, and the pace of buybacks and cash conversion against the free cash flow target.