Jacobs reported a strong Q3 with record backlog and raised full-year guidance for the third consecutive time. The company is seeing significant growth in its AI/data center business and a gradual recovery in its environmental and PA Consulting segments. Adjusted EPS grew 14% to $1.84, driven by 8% organic net revenue growth and margin expansion.
Jacobs reported a strong Q3 with record backlog and raised full-year guidance for the third consecutive time. The company is seeing significant growth in its AI/data center business and a gradual recovery in its environmental and PA Consulting segments. Adjusted EPS grew 14% to $1.84, driven by 8% organic net revenue growth and margin expansion.
Jacobs reported a strong Q3 with record backlog and raised full-year guidance for the third consecutive time. The company is seeing significant growth in its AI/data center business and a gradual recovery in its environmental and PA Consulting segments.
Adjusted EPS grew 14% to $1.84, driven by 8% organic net revenue growth and margin expansion.
Management highlighted strong momentum in AI infrastructure, with direct AI build-out representing 11% of adjusted net revenue, up 100 basis points sequentially, and a pipeline of future opportunities growing meaningfully. They see substantial runway as AI investments increase…
Guidance · revenue to 9.75%
Management highlighted strong momentum in AI infrastructure, with direct AI build-out representing 11% of adjusted net revenue, up 100 basis points sequentially, and a pipeline of future opportunities growing meaningfully. They see substantial runway as AI investments increase and have expanded scope to include digital twins and full program delivery.
Management's tone is strongly positive, with a third consecutive guidance raise driven by accelerating revenue growth, record backlog, and margin expansion.
Management discussed significant AI data center investments, including a gigawatt-scale campus contract, and noted customers are pushing to accelerate designs. They also highlighted semiconductor construction activity accelerating, with a growing pipeline into FY27.
Management expressed confidence through strong results, repeated guidance raises, and optimistic forward-looking statements about growth and margin expansion.
“As of Q3, the direct AI build-out represented 11% of our adjusted net revenue, up approximately 100 basis points from last quarter.”
“so the visibility that we see before it was probably six to nine months, we're getting visibility into the pipeline that extends out two to three years.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $7.20–$7.30 | $7.25 | RAISED |
| Free cash flow | FY2026 | 8% | 8% | RAISED |
| Free cash flow | FY2026 Q4 | $150M | $150M | GUIDED |
| Op margin | FY2026 Q4 | 16% | 16% | GUIDED |
| Op margin | FY2026 | 14.7%–14.8% | 14.75% | RAISED |
| Revenue | FY2026 | 9.5%–10% | 9.75% | RAISED |
| Revenue | FY2026 Q4 | 14% | 14% | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | Op margin | FY2026 Q2 | 13.8%–14% | -2.2% | Missed |
Jacobs' AI-related revenue is directly tied to the physical AI buildout and reached 11% of total revenue, up 100bps quarter-over-quarter. — Rapid growth in AI infrastructure spend is creating a durable and accelerating revenue stream for Jacobs, indicating broad demand for construction and design services from hyperscalers and neoclouds.
“we've been the engineer of record for Intel for a couple of decades. And in that relationship, we stayed with them during this kind of slower time. And we're starting to see that pipeline grow going into 27.”
Thank you. I appreciate that. You know, I guess secondly, are customers kind of still indicating that the U.S. semiconductor construction activity is accelerating? And maybe what are some of your early thoughts for FY27 on that front?
Thank you. Short answer, Andrew, is absolutely yes. Our customers are pushing us to accelerate those designs. And we're working for the largest high bandwidth memory chip manufacturer in the U.S. today. So that pipeline continues to grow. And now with the announcements that you've heard from Intel moving forward, you know, as we've publicly stated, we've been the engineer of record for Intel for a couple of decades. And in that relationship, we stayed with them during this kind of slower time. And we're starting to see that pipeline grow going into 27.