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    Jacobs Solutions Inc (J)

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    Jacobs Solutions Inc. is a global professional services company that delivers technology-centric solutions to tackle complex challenges across various sectors . The company operates through two primary lines of business: Critical Mission Solutions (CMS) and People & Places Solutions (P&PS), offering services that range from information and cyber warfare to climate change and smart cities . Jacobs generates revenue from both cost-reimbursable and fixed-price contracts, with a significant portion coming from cost-reimbursable contracts . The company also invests in PA Consulting and operates Divergent Solutions (DVS), which integrates offerings to both CMS and P&PS . Jacobs' operations are geographically diverse, with a presence in North America, Europe, the Middle East, India, Australia, New Zealand, and Asia .

    1. Critical Mission Solutions (CMS) - Provides solutions for information and cyber warfare, digital transformation, national security, defense, space exploration, and green energy transition, serving sectors like Aerospace, Automotive, Space, Telecom, Intel, Defense, and Energy .
    2. People & Places Solutions (P&PS) - Offers end-to-end solutions for challenges related to climate change, energy transition, connected mobility, integrated water management, and smart cities, serving clients in Infrastructure, Cities & Places, Energy & Environmental, Health & Life Sciences, and Advanced Manufacturing .
    3. Divergent Solutions (DVS) - Integrates offerings to both CMS and P&PS, enhancing the company's ability to deliver comprehensive solutions across its business lines .
    NamePositionStart DateShort Bio
    Robert V. PragadaChair and Chief Executive OfficerFebruary 2016Robert V. Pragada rejoined Jacobs in February 2016 after serving as President and CEO of The Brock Group. He initially joined Jacobs in 2006 and has held various leadership roles, including President and COO from 2019 to 2023. He became CEO in January 2023 and Chair of the Board in September 2024 .
    Venk NathamuniChief Financial OfficerJune 3, 2024Venk Nathamuni joined Jacobs as CFO on June 3, 2024. He was previously CFO at Cirrus Logic Inc. and held roles at Arista Networks and Maxim Integrated Products, Inc., with over 30 years of experience in finance and strategic leadership .
    Joanne E. CarusoExecutive Vice President, Chief Legal and Administrative Officer2012Joanne E. Caruso joined Jacobs in 2012. She has served as Senior Vice President, Chief Administrative Officer, and held positions in Global Human Resources and Global Litigation. Before Jacobs, she was a partner at Howrey LLP and Baker & Hostetler LLP .
    Patrick X. HillExecutive Vice President and President, Global Operations1998Patrick X. Hill joined Jacobs through the SKM acquisition in 1998. He has held senior leadership roles across various regions and sectors. In December 2023, he became Executive Vice President and President, Global Operations .
    Shannon MillerExecutive Vice President and President, Strategy, Growth and Digital1998Shannon Miller joined Jacobs in 1998. She has led cultural and digital transformations across multiple markets. In December 2023, she became Executive Vice President and President, Strategy, Growth & Digital. Previously, she was Executive Vice President and President of Divergent Solutions and Chief Growth Officer .
    William B. Allen, Jr.Chief Accounting OfficerOctober 2016William B. Allen, Jr. joined Jacobs in October 2016. Before Jacobs, he was Vice President, Finance and Principal Accounting Officer at LyondellBasell Industries, N.V., and held roles at Albemarle Corporation, including Vice President, Corporate Controller, and Chief Accounting Officer .
    1. "Given the significant reliance on government stimulus programs like the IIJA and CHIPS Act to drive backlog growth, how are you preparing for potential funding delays or reductions, and what steps are you taking to diversify your revenue streams to mitigate this risk?"
    2. "With the upcoming spin-off and merger with Amentum, can you elaborate on the specific challenges you anticipate in separating the Critical Mission Solutions and Cyber & Intelligence businesses, and how you plan to address any operational disruptions or cost increases during this transition?"
    3. "You mentioned that approximately two-thirds of your water-related and life sciences business is concentrated in high-value, science-based consulting and advisory services. How sustainable is this level of high-margin work, and what are the risks of increased competition or market saturation impacting your margins in these sectors?"
    4. "Can you provide more detail on your capital allocation strategy post-spin-off, specifically regarding your appetite for M&A versus returning capital to shareholders, and how you intend to balance organic growth opportunities with potential acquisitions to drive shareholder value?"
    5. "Given the robust backlog and strong book-to-bill ratio in People & Places Solutions, what challenges do you foresee in converting this backlog into revenue, and are there any capacity constraints or supply chain issues that could impact your ability to deliver on these projects timely and maintain your margin expansion trajectory?"
    Program DetailsProgram 1
    Approval DateJanuary 25, 2023
    End Date/DurationJanuary 25, 2026
    Total additional amount$1.0 billion
    Remaining authorization$472.2 million as of September 27, 2024
    DetailsThe program allows for the repurchase of up to $1.0 billion of the Company's common stock. It is not obligatory for the Company to purchase any shares, and repurchases may be executed through various means depending on market conditions and other factors.
    YearAmount Due (in millions)Debt TypeInterest Rate% of Total Debt
    2025870.4152021 Term Loan Facility - GBP Portion6.23%39.1% = (870.415 / 2224) * 100
    20261202021 Term Loan Facility - USD Portion6.52%5.4% = (120 / 2224) * 100
    2028140Revolving Credit Facility6.64%6.3% = (140 / 2224) * 100
    20286006.35% Bonds6.35%27.0% = (600 / 2224) * 100
    20335005.90% Bonds5.90%22.5% = (500 / 2224) * 100

    Competitors mentioned in the company's latest 10K filing.

    • AECOM
    • Tetra Tech
    • WSP
    • Arcadis
    • Bechtel
    • Arup
    • Mott MacDonald
    • Stantec
    • Parsons
    • Accenture
    • Schneider Electric
    • Mace
    • AtkinsRealis
    • Altair
    • Montrose
    • Capgemini
    • Fluor
    • IBM
    • Infosys
    • Deloitte
    • KPMG
    • PwC
    • Bain & Company
    • BCG
    • McKinsey & Company

    These companies are mentioned as competitors in the markets where Jacobs Solutions Inc. provides services, which include technology, consulting, and engineering firms .

    NameStart DateEnd DateReason for Change
    Ernst & Young LLP1987 PresentCurrent auditor

    Recent developments and announcements about J.

    Financial Reporting

      Earnings Report

      ·
      Nov 19, 2024, 8:05 PM

      Jacobs Solutions Inc. (NYSE: J) has released its financial results for the fiscal fourth quarter and fiscal year ended September 27, 2024.

      Q4 2024 Financial Highlights

      • Revenue: $3.0 billion, a 4.4% increase year-over-year.
      • Net Income: $309 million, up 333.1% year-over-year.
      • Earnings Per Share (EPS): $2.38, a 277.8% increase year-over-year.
      • Backlog: $21.8 billion, up 22.5% year-over-year.

      Fiscal Year 2024 Highlights

      • Revenue: $11.5 billion, a 6.0% increase year-over-year.
      • Net Income: $613 million, up 61.6% year-over-year.
      • EPS: $4.79, a 57.0% increase year-over-year.
      • Free Cash Flow Conversion: Exceeded 100% of net income.

      Significant Trends and Strategic Moves

      • Jacobs completed the separation of its Critical Mission Solutions and Cyber & Intelligence businesses, now trading as Amentum (NYSE: AMTM).
      • The company recorded $187 million in mark-to-market gains on its investment in Amentum, boosting Q4 GAAP net income.
      • Jacobs is focusing on a simpler, higher-value, and higher-margin portfolio, with strong demand in end markets such as Water and Environmental, Critical Infrastructure, and Life Sciences and Advanced Manufacturing.

      Outlook for Fiscal Year 2025

      • Adjusted Net Revenue Growth: Expected to grow mid-to-high single digits over fiscal 2024.
      • Adjusted EBITDA Margin: Expected to range from 13.8% to 14.0%.
      • Adjusted EPS: Expected to range from $5.80 to $6.20.
      • Free Cash Flow Conversion: Expected to exceed 100% of net income.

      Jacobs' strategic shift and financial strength position it well for continued growth and shareholder returns in fiscal year 2025 and beyond .

    Financial Actions

      Strategic Assets

      ·
      Sep 30, 2024, 12:00 AM

      Jacobs Solutions Inc. Completes Major Asset Disposition

      On September 27, 2024, Jacobs Solutions Inc. successfully completed a significant transaction involving the disposition of its Critical Mission Solutions (CMS) and portions of the Divergent Solutions (DVS) business, collectively known as the SpinCo Business. This was achieved through a Reverse Morris Trust transaction, which included a series of strategic agreements and mergers .

      Transaction Details

      • Separation and Distribution: Jacobs transferred its CMS and C&I businesses to a newly formed entity, SpinCo. Subsequently, Jacobs distributed 124,084,108 shares of SpinCo common stock to its shareholders on a pro rata basis .
      • Merger: SpinCo merged with Amentum, with SpinCo surviving as an independent public company listed on the New York Stock Exchange under the symbol "AMTM" .
      • Ownership Structure: Post-transaction, Jacobs' shareholders own approximately 51% of SpinCo, Jacobs retains about 7.5%, and Amentum Equityholder holds around 37%. An additional 4.5% of SpinCo stock is held in escrow as contingent consideration, dependent on SpinCo's fiscal year 2024 performance .

      Financial Implications

      • Cash Payment: Jacobs received approximately $0.9 billion from SpinCo, which is subject to adjustments based on SpinCo's cash, debt, and working capital levels .
      • Debt Reduction: The cash received was used to fully redeem $575 million of the 2020 Term Loan Facility and partially redeem $333 million of revolving credit facility debt, resulting in a net zero impact on cash balances .
      • Pro Forma Financials: The transaction is expected to impact Jacobs' financial statements, with the CMS and C&I businesses being reflected as discontinued operations in future reports .

      Operational Impact

      • Strategic Focus: This transaction allows Jacobs to streamline its operations and focus on its core business areas, potentially enhancing operational efficiency and financial performance.
      • Future Plans: Jacobs intends to dispose of its remaining equity stake in SpinCo within 12 months, further simplifying its business structure .

      This strategic move is anticipated to provide Jacobs with greater financial flexibility and a more focused operational approach, aligning with its long-term business objectives .