Jacobs Solutions Inc (J) Q2 2024 Earnings Report

- Jacobs reported solid Q2 2024 results with gross revenue up 5% YoY and adjusted net revenue up 3%, driven by strong performance in People & Places Solutions (P&PS) and ongoing momentum in higher-margin, profitable growth initiatives. Backlog increased 2% YoY and gross margin in backlog rose about 50 bps, supporting confidence in profitable growth across core lines.
- The segment highlights show P&PS delivering a record adjusted operating margin of 15.3% (YoY up ~130 bps) with organic revenue growth of 7.5% and adjusted net revenue up 5.6%. CMS posted a 3% YoY revenue rise with ~50 bps margin expansion and an 10% uplift in adjusted operating profit, though a recent program loss and a space ISR funding shift impacted near-term dynamics. Divergent Solutions faced a meaningful YoY decline in adjusted net revenue (~11%) and adjusted operating profit (~24%), largely reflecting the DoD funding reallocation and separation considerations. PA Consulting continued to generate a strong margin (20.5%), even as revenue declined about 2% YoY, underscoring pricing discipline and execution.
- Management reaffirmed a constructive outlook centered on IIJA-driven opportunities, PFAS-related demand, and long-cycle water/life sciences programs, while guiding FY2024-adjusted EBITDA to $1.54–$1.585 billion and adjusted EPS to $7.80–$8.10, implying ~13% EPS growth in H2 vs 2023. Free cash flow conversion remains guided at 100% for the year, aided by a robust balance sheet and capital return strategy (share repurchases and dividend).