Fiscal Q3 2026
Filed Aug 4, 2026Jacobs Reports Strong Fiscal Third Quarter 2026 Results
Gross revenue, adjusted net revenue, adjusted EBITDA, adjusted EPS, backlog and operating cash flow increased, while the company raised the midpoint of adjusted net revenue growth and adjusted EPS guidance for the third consecutive quarter. GAAP net earnings and GAAP EPS declined as the company cited a temporarily higher tax rate associated with the PA acquisition transaction.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Gross revenueGAAP | $4,076,410 (in thousands) | – | up 34.5% y/y |
| Adjusted net revenuenon-GAAP | $2,416,608 (in thousands) | – | up 8.3% y/y |
| GAAP net earnings from continuing operationsGAAP | $137,359 (in thousands) | – | – |
| GAAP earnings per diluted share from continuing operationsGAAP | $1.16 | – | – |
| Adjusted net earnings from continuing operationsnon-GAAP | $219,263 (in thousands) | – | – |
| Adjusted EPS from continuing operationsnon-GAAP | $1.84 | – | increased 13.6% y/y |
| Adjusted EBITDAnon-GAAP | $366.8 million | – | increased 16.7% y/y |
| U.S. GAAP effective tax rate from continuing operationsGAAP | 43.4% | – | 2,150 bps |
| Adjusted effective tax rate from continuing operationsnon-GAAP | 26.4% | – | 160 bps |
| Backlogother | $28.9 billion | – | up 27.3% y/y |
| Q3 book-to-billother | 1.5x | – | – |
| TTM book-to-billother | 1.4x | – | – |
| Q3 adjusted net revenue book-to-billnon-GAAP | 1.1x | – | – |
| TTM adjusted net revenue book-to-billnon-GAAP | 1.2x | – | – |
| Cash generated from operating activitiesGAAP | $456 million | – | – |
| I&AF segment gross revenue growthother | increased 39% year-on-year | – | increased 39% year-on-year |
| I&AF segment adjusted net revenue growthnon-GAAP | increased 10% | – | increased 10% |
fiscal 2026 outlook
- Revenueadjusted net revenue to grow 9.5% to 10.0% over fiscal 2025
- Noteadjusted EBITDA margin to range from 14.7% to 14.8%
- Noteadjusted EPS to range from $7.20 to $7.30
- Noteadjusted free cash flow margin to be approximately 8%
Capital returns
- Repurchased $142 Million of Jacobs Shares in Q3
- $614 Million Year-to-Date
What drove it
- I&AF segment gross revenue increased 39% year-on-year and adjusted net revenue increased 10%, all organic.
- Within I&AF, growth was broad-based and led by the Data Center, Semiconductor, Energy & Power, Transportation and Water sectors.
- Private-sector and utility clients continued to boost capital spending.
- The company cited record performance in its Life Sciences & Advanced Manufacturing end market.
- The company cited spending on the AI build-out and its portfolio of solutions for increasingly complex manufacturing and compute facilities.
- ENR ranked Jacobs #1 in 18 categories, including Data Centers, up 6 y/y.
Concerns
- GAAP net earnings from continuing operations declined to $137,359 (in thousands) from $181,234 (in thousands).
- GAAP EPS from continuing operations declined to $1.16 from $1.56.
- The company attributed the GAAP earnings and EPS decline to a temporarily higher tax rate associated with the PA acquisition transaction.
- The U.S. GAAP effective tax rate from continuing operations was 43.4%, compared with 21.9%.
What to watch
- Execution against fiscal 2026 adjusted net revenue growth guidance of 9.5% to 10.0% over fiscal 2025.
- Delivery of adjusted EBITDA margin guidance of 14.7% to 14.8%.
- Delivery of adjusted EPS guidance of $7.20 to $7.30 and adjusted free cash flow margin of approximately 8%.
- Whether record backlog of $28.9 billion and TTM book-to-bill of 1.4x continue to support growth.
- The duration of the temporarily higher tax rate associated with the PA acquisition transaction and progress integrating PA Consulting.
Balance sheet and cash flow
- Generated $456 million in Cash from Operations in Q3
- The resulting increase in free cash flow helped reduce net leverage to below the year-end target.
Analysis
Jacobs reported strong fiscal third-quarter operating momentum. Gross revenue was $4,076,410 (in thousands), up 34.5% y/y, while adjusted net revenue was $2,416,608 (in thousands), up 8.3% y/y. Management characterized the I&AF segment's gross-revenue growth as 39% year-on-year and its adjusted-net-revenue growth as 10%, all organic. It cited broad-based growth led by Data Center, Semiconductor, Energy & Power, Transportation and Water, alongside increased capital spending by private-sector and utility clients.
Demand indicators remained favorable. Backlog reached $28.9 billion, up 27.3% y/y, and Q3 book-to-bill was 1.5x, with a 1.4x TTM ratio. Q3 adjusted net revenue book-to-bill was 1.1x and the TTM adjusted net revenue book-to-bill was 1.2x. Management also pointed to a rising opportunity pipeline across I&AF and PA Consulting and record performance in Life Sciences & Advanced Manufacturing.
Profitability was stronger on an adjusted basis but weaker under GAAP. Adjusted EBITDA was $366.8 million, increasing 16.7% y/y, while adjusted EPS increased 13.6% y/y to $1.84. In contrast, GAAP net earnings from continuing operations were $137,359 (in thousands), versus $181,234 (in thousands), and GAAP EPS was $1.16, versus $1.56. The company linked the GAAP decline to a temporarily higher tax rate associated with the PA acquisition transaction. The U.S. GAAP effective tax rate was 43.4%, compared with 21.9%, while the adjusted effective tax rate was 26.4%, compared with 24.8%.
Cash generation and capital allocation were notable. Jacobs generated $456 million in cash from operating activities during Q3 and stated that the resulting free-cash-flow increase reduced net leverage below its year-end target. The company repurchased $142 Million of shares in Q3 and $614 Million year-to-date. No cash balance, debt balance, net-leverage ratio or quantified free-cash-flow amount was provided in the supplied filing text.
The fiscal 2026 outlook was tightened and its midpoints were raised for adjusted net revenue growth and adjusted EPS. The company now expects adjusted net revenue growth of 9.5% to 10.0% over fiscal 2025, adjusted EBITDA margin of 14.7% to 14.8%, adjusted EPS of $7.20 to $7.30, and adjusted free cash flow margin of approximately 8%. The key reported issues for investors are whether backlog conversion and I&AF-led organic growth can sustain the raised outlook, and whether the acquisition-related tax effect remains temporary as described.
Management, verbatim
We delivered robust overall third quarter results driven by strength in Infrastructure & Advanced Facilities (I&AF) as segment gross revenue increased 39% year-on-year and adjusted net revenue increased 10% - all organic.
Bob Pragada, Chair and CEO
The combination of strong execution, a record backlog position and a rising pipeline of opportunities across both I&AF and PA Consulting gives us confidence in our long-term trajectory.
Bob Pragada, Chair and CEO
Top-tier revenue growth, paired with good operating performance, drove solid quarter-over-quarter improvement in our margin profile, which was further complemented by $456 million in reported cash generated from operating activities during Q3.
Venk Nathamuni, CFO
Not in the filing
stated, not guessed- Prior-quarter figures for revenue, adjusted net revenue, GAAP net earnings, GAAP EPS, adjusted net earnings, adjusted EPS, adjusted EBITDA, tax rates, backlog, book-to-bill, operating cash flow and segment growth were not provided.
- Year-over-year changes were not provided on the Third Quarter Review rows for GAAP net earnings, GAAP EPS, adjusted net earnings and adjusted EPS; only the printed prior-year values and changes in dollars or per share were provided.
- Gross margin, operating income, operating margin, operating expenses, cash balance, debt balance, net-leverage ratio, quantified free cash flow, dividend information and segment revenue amounts were not provided in the supplied filing text.
- A separate previous-release outlook was not provided; therefore, no actual-versus-prior-guidance comparison is included.
- The filing states that reconciliation of fiscal 2026 adjusted EBITDA margin, adjusted EPS, adjusted net revenue growth and adjusted FCF margin to the most directly comparable GAAP measure is not available without unreasonable efforts.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.