8-K: Jacobs Reports Strong FY25 Earnings, Record Backlog

Jacobs Solutions Inc. announced strong fiscal fourth quarter and full-year 2025 earnings, driven by revenue growth, record backlog, and significant capital returns to shareholders.

Summary

• Gross revenue for Q4 2025 was $3.2 billion, up 6.6% year-over-year; adjusted net revenue was $2.2 billion, up 5.8% year-over-year.
• GAAP net earnings for Q4 2025 decreased (55.4)% year-over-year to $138 million, primarily impacted by mark-to-market gains/losses from the previous stake in Amentum stock.
• Adjusted EBITDA for Q4 2025 increased 12.0% year-over-year to $324 million.
• GAAP EPS for Q4 2025 decreased (55.9)% year-over-year to $1.05; adjusted EPS increased 27.7% year-over-year to $1.75.
• Backlog reached a new record of $23.1 billion, up 5.6% year-over-year, with a Q4 book-to-bill ratio of 1.1x (1.1x TTM).
• For fiscal year 2025, gross revenue was $12.0 billion, up 4.6% year-over-year; adjusted net revenue was $8.7 billion, up 5.3% year-over-year.
• GAAP net earnings for fiscal year 2025 decreased (48.9)% year-over-year to $313 million, impacted by mark-to-market gains/losses from the previous stake in Amentum stock.
• Adjusted EBITDA for fiscal year 2025 increased 13.9% year-over-year to $1.2 billion.
• GAAP EPS for fiscal year 2025 decreased (46.1)% year-over-year to $2.58; adjusted EPS increased 15.9% year-over-year to $6.12.
• Cash conversion and reported free cash flow conversion exceeded 100% for fiscal year 2025.
• A record $1.1 billion was returned to shareholders through share repurchases and dividends in fiscal year 2025.

Sentiment

Score: 8

Explanation: The company reported strong adjusted financial results, record backlog, and positive guidance for FY26, despite a significant GAAP net earnings decline primarily due to non-cash mark-to-market adjustments related to Amentum stock. The underlying operational performance and future outlook are very positive.

Positives

• Gross Revenue grew 6.6% year-over-year in Q4 2025 to $3.2 billion.
• Adjusted Net Revenue grew 5.8% year-over-year in Q4 2025 to $2.2 billion.
• Adjusted EBITDA increased 12.0% year-over-year in Q4 2025 to $324 million.
• Adjusted EPS increased 27.7% year-over-year in Q4 2025 to $1.75.
• Backlog reached a new record of $23.1 billion, up 5.6% year-over-year.
• The Trailing Twelve Month (TTM) Book-to-Bill Ratio was 1.1x.
• Fiscal Year 2025 Gross Revenue grew 4.6% year-over-year to $12.0 billion.
• Fiscal Year 2025 Adjusted Net Revenue grew 5.3% year-over-year to $8.7 billion.
• Fiscal Year 2025 Adjusted EBITDA increased 13.9% year-over-year to $1.2 billion.
• Fiscal Year 2025 Adjusted EPS increased 15.9% year-over-year to $6.12.
• Cash conversion and reported free cash flow conversion exceeded 100% for FY25.
• A record $1.1 billion was returned to shareholders through share repurchases and dividends in FY25.
• Exited the first year of the strategy cycle above the high-end of the annual 50-80 basis point margin expansion target.
• PA Consulting saw revenue growth accelerate during the fiscal year, contributing positively to consolidated results.
• Anticipate continued synergistic expansion with PA Consulting and a record backlog, positioning for profitable growth.
• Forecasting further margin improvement in FY26.

Negatives

• GAAP net earnings decreased (55.4)% year-over-year in Q4 2025 to $138 million, impacted by mark-to-market gains/losses from Amentum stock in the comparable period.
• GAAP EPS decreased (55.9)% year-over-year in Q4 2025 to $1.05.
• GAAP net earnings decreased (48.9)% year-over-year in FY 2025 to $313 million, impacted by mark-to-market gains/losses from Amentum stock in the comparable period.
• GAAP EPS decreased (46.1)% year-over-year in FY 2025 to $2.58.
• The U.S. GAAP effective tax rate from Continuing Operations increased to 28.6% in Q4 2025 from 18.9% in Q4 2024.
• The U.S. GAAP effective tax rate from Continuing Operations increased to 39.7% in FY 2025 from 16.9% in FY 2024.
• A reserve was made in connection with an unfavorable interim ruling against a consolidated joint venture (Consolidated JV Matter), impacting I&AF revenue and operating profit for FY25.
• FY 2025 included $227.3 million in mark-to-market losses and other related charges associated with the investment in Amentum stock.

Risks

• General economic conditions, including inflation, interest rates, foreign currency exchange rates, capital markets volatility, banking industry instability, labor shortages, and the impact of a possible recession or economic downturn.
• Competition from existing and future competitors, potential reduction in demand for certain product solutions and services, delays in project awards, or reduction in funding due to client financial condition or governmental budget constraints.
• Ability to fully execute corporate strategy, including the impact of acquisitions, strategic alliances, divestitures, and other strategic events on maintaining culture, retaining key personnel, customers, or suppliers, and achieving cost-savings and synergies.
• Financial market risks that may affect access to capital, the cost of such capital, and/or funding obligations under defined benefit pension and postretirement plans.
• Legislative changes, including potential changes to the Infrastructure Investment and Jobs Act, other governmental spending legislation, and changes in U.S. or foreign tax laws, tariffs, or trade policies.
• Increased geopolitical uncertainty and risks, including policy risks, potential civil unrest relating to election outcomes, and elevated geopolitical tensions and conflicts (e.g., Russia-Ukraine, Israel-Hamas, Middle East).
• The impact of any pandemic and any resulting economic downturn on results, prospects, and opportunities, as well as the inability of governments to effectively mitigate financial or other impacts of future pandemics.

Future Outlook

For fiscal 2026, Jacobs expects adjusted net revenue to grow 6% to 10% over fiscal 2025, adjusted EBITDA margin to range from 14.4% to 14.7%, adjusted EPS to range from $6.90 to $7.30, and free cash flow margin to range from 7.0% to 8.0%. The midpoint of the adjusted EPS guidance represents 16% growth.

Management Comments

• "We are pleased to have met or exceeded all our key metrics for FY25. We grew revenue organically mid-single-digits year-over-year and expanded our operating margin meaningfully." Bob Pragada, Chair and CEO.
• "The Life Sciences, Data Center, Water, Energy & Power and Transportation sectors drove Infrastructure & Advanced Facilities' (I&AF) revenue growth in FY25, and we anticipate these sectors will remain strong in FY26 and beyond." Bob Pragada, Chair and CEO.
• "We enter FY26 with multiple secular tailwinds, clear line-of-sight to continued synergistic expansion with PA Consulting and a record backlog, positioning us for profitable growth." Bob Pragada, Chair and CEO.
• "We exited the first year of our strategy cycle above the high-end of the annual 50-80 basis point margin expansion target we established at our February Investor Day, and we are forecasting further margin improvement in FY26." Venk Nathamuni, CFO.
• "We delivered a record $1.1 billion of capital back to shareholders during FY25 through share repurchases and dividends, and we plan to continue returning capital to shareholders given the strength of our balance sheet and our outlook for cash generation." Venk Nathamuni, CFO.
• "We are starting FY26 with a record backlog, and we anticipate growth in revenue, margins, EPS and free cash flow for the full fiscal year." Venk Nathamuni, CFO.

Industry Context

The company's growth is driven by strong performance in key infrastructure and advanced facilities sectors such as Life Sciences, Data Center, Water, Energy & Power, and Transportation, indicating alignment with current global investment trends in critical infrastructure and technology. The acceleration of revenue growth at PA Consulting also suggests strong demand for specialized consulting services.

Comparison to Industry Standards

• No specific comparable companies, projects, or global benchmarks are mentioned in the filing.

Legal Proceedings

• A reserve was made in connection with an unfavorable interim ruling against a consolidated joint venture (the "Consolidated JV Matter"), impacting I&AF revenue and operating profit for the year ended September 26, 2025.

Related Party Transactions

• GAAP net earnings were impacted by mark-to-market gains/losses in the comparable period from the previous stake in Amentum stock.
• Fiscal Year 2025 included $227.3 million in mark-to-market losses and other related charges associated with the investment in Amentum stock in connection with the Separation Transaction.
• Income and charges associated with the Company's TSA (Transition Services Agreement) with Amentum were noted.
• Discounts and expenses associated with the non-cash equity-for-debt transaction involving Amentum shares on March 13, 2025.

Stakeholder Impact

• Shareholders: Positive impact due to record capital returns ($1.1 billion through repurchases and dividends), strong adjusted EPS growth, record backlog, and positive FY26 guidance.
• Employees: Potential impact from restructuring and other charges related to the Separation Transaction and certain subsidiary level compensation based agreements.
• Customers: Continued service delivery and growth in key sectors like Life Sciences, Data Center, Water, Energy & Power, and Transportation.
• Creditors: Positive impact from debt reduction through the equity-for-debt exchange.

Next Steps

• Continue synergistic expansion with PA Consulting.
• Continue returning capital to shareholders given the strength of the balance sheet and outlook for cash generation.
• Host a conference call at 10:00 A.M. ET on Thursday, November 20, 2025, which will be webcast live at www.jacobs.com.

Key Dates

Recommendation

The company demonstrates robust operational performance with strong adjusted revenue and EPS growth, record backlog, and a positive outlook for fiscal year 2026. The significant GAAP net earnings decline is primarily attributable to non-cash mark-to-market adjustments related to the Amentum spin-off, which is a non-recurring item and does not reflect the core business health. Management's commitment to shareholder returns and exceeding margin expansion targets further reinforces a strong investment thesis. The secular tailwinds in key growth sectors position the company for continued profitable growth.

Keywords

Jacobs Solutions, J, earnings, fiscal year 2025, Q4 2025, financial results, revenue, EPS, EBITDA, backlog, book-to-bill, infrastructure, advanced facilities, PA Consulting, shareholder returns, capital allocation, financial outlook, engineering, consulting