JACOBS SOLUTIONS INC. — Call Transcript 2026

All right, hate to interrupt the smooth jazz, but we'll get going here. So, so my name's Adam Seiden, and I lead the U.S. Machinery and Construction effort here at Barclays. Thanks for joining us again for the Industrials Conference. So for this session here, we have the folks from Jacobs. So, we have both Bob and Venk, CEO and CFO, so really excited for these guys to be joining us. For the format of this session, like a lot of the others here at the conference, we'll be doing a fireside chat. We do invite your participation, though, through the gadgets that are on your tables there, where we'll be taking some questions for the audience. So certainly, welcome your participation. So with that, Team Jacobs, welcome back to Miami. Thanks, Adam. Thank you. Thanks for having us. Well, you got it, and always good to have you guys here. So last year in Miami, actually, you guys were here for this conference, but you were also here for some other things as well, including your Investor Day. So, back, back at the Investor Day, one of the takeaways you were talking about, like, y- redefining the asset cycle, or asset life cycle, sorry, and moving towards, you know, higher value services. So I guess here we are, one year later, you know, what progress have you made in that transition? And, you know, what tangible changes can we expect over the next couple of years here? Yeah. So, so Adam, I'd say we've made tremendous progress along that effort. The good news is that when we said redefining the asset life cycle, we've always been in the business of driving client outcomes. But, but in certain cases and in other cases, we haven't necessarily had the ability to influence in an earlier stage of of a client's capital decision-making process in order to to deliver that outcome, right? So, so that was kind of the the origins, but it wasn't coming from scratch. We'd had we had a bit of a a runway beforehand. Since the Investor Day, we've made great progress, I think, demonstrated by our financial results over the course of the last Q4, and culminating last quarter and probably one of the best quarters that we've had in recent history. Going back, been with the company for 20 years, and I think that's probably one of the best quarters we've ever had. But it wasn't by chance, and it wasn't a one-off. It really was a build-up of this, what's happening in our end markets, specifically in places like life sciences and advanced manufacturing and the water sector, as well as our international business. It's kind of been a nice and a nice nugget in front of us. Really delivering to long-term client relationships and getting involved very, very early in that decision-making phase. It's gone well. Great. Talking a little bit about the, the portfolio and really the backlog here. The backlog is at very nice record levels there. How would you, you know, how would you characterize the duration, the margin profile, and really the risk that you guys are taking within those contracts in the backlog today versus, you know, where you'd want it to be? Yeah. Maybe I'll have Venk talk a little bit about kind of the profile of the backlog, but maybe I'll address the risk comment. Just to be clear, we are not taking on added risk as a result of getting kind of the full program delivery for these jobs. We have a long history in full program delivery in life sciences and in the water sector. Now, with the speed that's required around very complex AI data centers, that level of delivery certainty at scale is what our data center clients are asking us for, but the risk posture is the same. Okay. Yeah, and then just on the backlog, you know, I'd say obviously, last quarter was a, you know, tremendous quarter in terms of our book-to-bill being 2.0. But when you look at it from a trailing twelve-month perspective, it's been rising pretty steadily, you know, from 1.2 a few quarters back now to 1.4. So we feel really good about the, the growing book of business, and it's very representative of our overall end market exposure. As you know, you know, 50% critical infrastructure, about 25% in life sciences and advanced manufacturing, and then the other 25% in water and environmental. So it's a fairly good representation of our end market exposure, and that's what we see. If anything, we're seeing, you know, higher growth in our life sciences and advanced manufacturing, driven by not only some of the work that we're doing for the GLP manufacturers, but also what we're seeing in the data center side. So overall, we feel pretty good about the backlog and continuing to grow it, and in terms of the pipeline, visibility is pretty strong. If I could just put a fine point on the backlog, and you talked a little bit about the 2.0, you know, in Q1 so far. So as we think about, you know, through the year, a book-to-bill of, you know, 1 or above, is that a reasonable expectation for this year? Yeah. I think, you know, obviously, we're not gonna print 2.0 every quarter, but, suffice it to say that the trend has been up and to the right, and we have good visibility in terms of the pipeline looking ahead as well. Great. So there's the backlog, kind of like sets the table for what's to come. Obviously, there's the burn of the backlog, and you guys were talking a bit about your revenue guidance. You did raise that a little bit. So I guess the simple question first is just essentially what determines if we land on the more mid-single-digit side versus kind of that, you know, the higher end of the revenue guidance? Yeah. I'd say the pace of play on some of our more tech manufacturing-centric jobs. You know, we didn't want to overcommit on what that velocity was gonna be on those jobs. As well as there's a bit of a ramping that we need to do in Q2. So the H2 kind of looks better, but that was, that was... It was the Q1. We knew that we were going to raise guidance after the Q1, but we were just taking a, you know, pragmatic view in case when things go either way. Got it. In Q4, there's an extra week as well that- Sure. Helps out too. Yeah. Okay. If we think about, like, the mix within the backlog, there has been within several large awards, they've carried, you know, a higher pass-through, so forth in revenue. How-- Can you just talk through a little bit of that dynamic and what that means for, you know, for Jacobs' book of business and how that will impact, you know, how that flows through to the P&L? Sure, sure. So I talked earlier about kind of the speed required around certain of our our life sciences and now data center clients, as well as in semi. But in semi, you know, we were really a an engineer and a design consultant in that space, do a lot of it. But that's kinda where we've stuck to our knitting there. On the data center component, you know, some customers, like the hyperscalers, have sophisticated capital projects teams. Interestingly enough, most of them come from our end of the sector anyway, so our end of the food chain or supply chain. But some of our data center clients, like neo-cloud providers, know a lot about data centers and the technology and what's going on within the, within the racks, but might not have project delivery expertise as well. That's the case, with the large award that we announced with Hut 8. They're a neo-cloud provider. Clients, you know, are, are gonna be Anthropic. FluidStack is gonna be the operator. Google is the investor. JPMorgan and Goldman Sachs are both the, the, the investor or the, the creditor. Came to us with a full program delivery, partnership, where we would procure on their behalf, equipment, subcontractors, and the like, and then have back-to-back terms with them and pass through that revenue. Great. And, and you just brought up data centers, and, I'm sure we'll talk about it a bit, throughout the conversation and advanced facilities work. So maybe just, the level of growth that we've seen in advanced facilities, whether that's, you know, life sciences, semi data, and- Yeah ... et cetera. How sustainable are those growth levels? And then, maybe if you could just talk to us as far as how big of an impact is data centers on the business today? Yeah. Well, short answer on sustainability of those end markets- Yeah ... we believe that they are sustainable. If I go back 10 years, 20 years, you know, it was a very cyclical market, where you'd have a novel therapy or a molecule, it'd get to market, and then there was a lot of consolidation happening in the biotech world. You know, today, with AI and drug discovery, these molecules are coming to market faster than before, and if you hear any of the CEOs of the large biotechs, count how many times they talk about capacity being the limiting factor with regards to manufacturing. And so I'd say that sustainability we see before we would have 6 to 9 to 12 months of visibility, we now have 24 months of pipeline- Mm ... visibility by line item. So I'd say it's, it's, it's strong there. The second around data centers, and it's an interesting dynamic. We talk about data centers as the, the ultimate, facility, but if you look at where Jacobs plays, we're playing across the AI infrastructure. So high bandwidth memory on the chips, we design those facilities. The utility requirements that are gonna be needed for the data center, driven by what's going on with the chip, you know, we're in the middle of that with power and water. And then the actual data center itself is, is innovating in real time. What gives us confidence that there's sustainability there? We have an exclusive partnership with NVIDIA- Yeah ... where we're doing digital twinning and simulation models on next-generation chips, in the virtual world and seeing what kind of requirements are there and how fast these things are getting to market, which kinda gives a runway on that side as well. Then, Adam, to your question about the size of the data center business, we've called it out to be about roughly 3-3.5% of our revenues, but it's growing at a very, very fast clip, you know, almost double in the last couple of years, and we see that pipeline continuing to grow. Then, to Bob's earlier point, the level of engagement that we have in the data center, the scope of engagement has gone up quite dramatically. So to the extent that few years ago, what would have been our, you know, work in the design of the innards of the data center, now has become a much more comprehensive, soup to nut solution, all the way from site selection to the power needs, the water needs, and ultimately, you know, implementing the data center in its entirety. The scope has increased by almost an order of magnitude for us. Yeah, and, and I just wanna clarify. Yeah. 3% is that last phase of the AI infrastructure chain, is the boundary limits of the data center. If you were to add on the utilities and add on what we're doing in the chip manufacturing space, that number probably goes to 10%-ish, so it's, it's, it's growing fast. Got it. So, so maybe, thinking through from the Analyst Day, a little bit from last year, you were targeting global delivery and cross-collaboration, increasing from, you know, call it around 40% over, you know, 50%, closer to the end of the decade. So what progress did you guys make on that in FY 2025, and then what are the drivers from here? Yeah, I'd say FY 2025 and the Q1 of 2026, we've made great progress. I think, yeah, we've made great progress on that. I don't wanna, I don't wanna jinx us just yet, but those targets that we put out might have already been surpassed. Okay. Yeah. That would be pretty quick. All right. So we're talking a little bit about AI. Yeah. and so for- Really, I didn't actually notice. Are you getting any questions? Yeah. So, first, let's talk about some of the tools and solutions. Yeah ... for yourself. So, you know, you've got your own sets of tools, and you're using, like, Acuity, Engage AI, and using that to deliver. How do you monetize those capabilities? Is it through margin expansion, win rates, larger projects? Just curious, like, how does that flow through for Jacobs? Yeah, all of the above. All of the above. Really, you know, how many basis points of margin expansion using AI is delivering? It's tough to measure because it's become such an integral part of how we deliver engagements, programs, projects. We've been on this journey for nearly seven years, and it started with digital enablement. We did a lot of design automation, as well as take the data analysis phase of what we do and really programmed in a lot of efficiencies there. Now we're moving into AI in a material way, not only for ourselves, like those items you said, as well as our sales process, a lot of the corporate functions groups, but more so for our clients' business. But if you look at the 32, 33 AI, AI-enabled platforms that we deliver for our clients, they're driving efficiencies for our clients, predominantly in the water sector, in the life sciences sector, and now we're deploying it on delivery of data centers as well. But we wouldn't be able to do those jobs had we not had those, those digital tools. Right? So, so said another way, AI and the, the digital enablement in a resource constraint, I mean, we're, we're significantly resource constraint- Sure is driving growth, headcount, billable hours, and revenue. Adam, another important part of all our software and digital capabilities is the fact that it allows us to get a lot more stickiness with our customers, so we have, you know, multi-year contracts. Obviously, from a margin perspective, even though it doesn't show up in the, in the top line, it does have, you know, substantially accretive margins relative to our overall business. Over time, you know, it has a very, very positive impact on both margins and stickiness and ultimately drives, you know, additional revenue growth over time. Got it. And- Go, you... No, Bob. Just because I know it's probably front of mind of a lot of people in the room right now. Yeah, that's where we're going. Yeah, exactly. Yeah. So why? Yeah. What—why not the, the Silicon Valley firm that can gather as much data as we have over the course of the last 40 years, come up with their own LLM, and, and, and basically, you know, eradicate an entire sector, right? A couple of things. One, access to that data is not as simple as possible. These are unstructured data that has been developed over hundreds of thousands of projects over 40 years, measured in... I'm not that so tech-savvy, in terabytes- Yeah or zettabytes or whatever. It's a lot of data. Yeah. We've been working to take that unstructured data into structured form, create our own LLM, called Jacobs AI- Sure ... put, you know, cyber protections around it, following all of the standards, codes, and regulations from around the world, right? And so that, that is, you know, that, that's something that doesn't happen overnight- Yeah One. Two is, knowing that AI is deterministic, looking backwards or, you know, what's been done, nothing that we're designing today looks the way it did before, and we're solving for future opportunities and future challenges, right? So it's a very, very dynamic world. Now, if a firm was in the commercial real estate building business- Yeah and it was a static structure that continues to be the same as it's been for 50 years, could there be... and companies like Bentley and Autodesk and others who are suppliers to us- Yes Are already innovating there. So I think that's where, you know, the client dialogue we're having right now is not around less billable hours or why do I need Adam, Bob, and Venk when I can just do it with Venk? We're not having those conversations. Our clients are asking us, "Hey, bring everything that you've got because we need this outcome as fast as we possibly can. Got it. And based on what you're saying, you're not worried that the client conversation transitions into that over time? No. In fact, a lot of those 32 platforms that we're talking about, we co-created with our clients. Yeah. Things like AquaDNA that we've talked about in the past- Sure ... Intelligent O&M, you know, Flood Modeller, all of these tools we've co-created with our clients, right? So... Yeah. So, so thinking of the portfolio a little bit in AI, so now you guys took a full ownership stake in PA. And with AI reshaping a little bit of- Yeah What's going on in the consulting world, so how does the PA plus Jacobs platform stack up competitively in that environment? I think really strong. You know, you're right, consulting has now turned into a four-letter word. But really, if you look at the technical advisory component of client PA's ability to take clients on that digital journey from a science-based perspective. Remember, one of the big drivers around making the 65% investment in 2021 when Carlyle went to market with that 65% was their digital capabilities, coupled with the fact that these weren't folks coming from the financial world or the IT sector. They were science-based scientists and engineers and business-focused people that were taking digital enablement to transform businesses, understanding the science of the business, right? Which was a nice fit for Jacobs, as, you know, we could get deeper into the boardroom when decisions were being made. We learned a lot over the last five years. We just to, for everyone's education is that we made the investment. The company, 35% was owned by the employees, the partners, and then they had separate governance and was run independently. So imagine the Venn diagram. We went to market opportunistically when our skill sets matched, and we could drive a greater client outcome, and then we operated independently. Mm-hmm. ... So now making this 35% investment, taking the learnings, five-year head start, we know where the talent is, combining our back offices, combining our pipelines, still having the PA brand. Mm-hmm. And now that digital capability has grown with Jacobs and PA to now 2,000 people that are holistically centered in on digital, along with all of the other items of PA that PA brings. So we're really excited and saw some nice growth numbers coming out of PA as well. Definitely. And a financial model that's accretive to the Jacobs core business. So, you know, obviously, margins that are industry-leading at 22% and top line growth of 5 single digits that we feel pretty good about as well. Great. Thank you, Venk. Maybe we'll shift to the audience response questions here. So just as a reminder for the audience, when the questions come up, once the clock starts to go, that's, that's your cue. So the first one is, do you currently own the stock? Yes, overweight, market weight, underweight, or no? All right. 80% of the room says no. Next question: What is your general bias towards the stock right now? Positive, negative, or neutral? All right. About a little over half the room is neutral. Next question: In your opinion, through cycle, EPS growth for Jacobs will be, above peers, in line with peers, and below peers? Happy we have Jacobs Solutions, not engineering. I think we've done that before. All right, about 50% in line, 40% above. Next question: In your opinion, what should Jacobs do with excess cash? Bolt on M&A, larger M&A, repos, divvies, debt pay down, or internal investment? Right after the PA conversation. All right, about 45% of the room says share repos. And I think our last one here is valuation. So in, in your optimism, what multiple of 26 earnings should... or optimism, geez, in your opinion, on what multiple of 26 earnings? Yeah, there you go. Should Jacobs trade ranges from less than 10x to higher than 21x? All right, so it's about a third of the room each in the 16 to 18x and 19 to 21x camp. Right. So it gives you that. So maybe thinking through a little bit of the base business, right? Everything that you do very well on the transportation side and the water side, et cetera. I guess I do have to ask the obligatory question just about what your view will be on reauthorization. And really just more so than forgetting about the policy view, it's more how does Jacobs, as a business, operate in a scenario where, like today, which we have the current program, and how does that influence at all, you know, your guys' ability to win work if we're in an extension scenario? Yeah, I think the extension scenario probably the impact would be neutral for us. We've gone through this before. Even the original IIJA- Yeah - was delayed by nearly two years. Yeah. So, you know, we're starting to see that continued trend. I think the number is 35% to 40% obligated and spent. Yeah. But the, the tail on that, on those dollars, continue on, so stay neutral. Great. In the quarter, I thought there was a little bit more talk around international and some of the tick up that you've seen there. So maybe could you touch on that, expand on that? You know, what types of projects are you seeing? How broad-based across the regions and so on? Yeah. Yeah, actually, you know, if you look at our results for Q1, we said that international grew faster than the domestic business, and that's driven by, you know, pretty broad performance across Australia and New Zealand. We've done really well in the Middle East, especially with some of the marquee projects that are being, you know, under development now, and we have a pretty strong position there, and we see some good pipeline there as well. And then the UK has been very strong. So obviously, after a few years of political uncertainty, we've had some stability in the last, call it year, year and a half, and we're seeing that, you know, show up in our business strength, both in terms of what we do at Jacobs, but also the, the PA business has been pretty strong as well for us. So international is very strong, and we continue to see that pipeline grow quite nicely. The add I would put on that is, you hear a lot about Australia. Yeah. And we've actually seen the opposite. You know, there were not a lot of huge, or was that huge, larger transportation jobs going on in the, the country. We were fortunate to win the largest, which is called, Torrens to Darlington. It's a job outside of, in Adelaide. And so that's really driven the business. But what was consistent and a continuation of what, what, Venk is saying is, is that our water business was solid across the world and drove the Australia growth as well. Got it. Maybe just to think through on one of the questions there, we had, like, uses of cash- Yeah Right? I had a broader question just around the industry and consolidation and so forth. So the sector's very fragmented. We talked a little bit about the current cross currents of the industry right now. I mean, how do you expect the industry to evolve? Do you see more combinations and so forth in the future, just given the environment or not? Yeah, maybe I, maybe I'll talk about the industry, and then, Venk, you can talk a little bit about kinda how we view on- Sure On Jacobs. On the industry, do I see, excuse me, sector-based consolidation happening? When I say sector- Yeah -by end market? Yeah. Likely, right? There, there are a lot of opportunities there. As far as large-scale consolidation- Yeah ... I wouldn't speculate. Sure that that would be, that would be something that's a, a certainty, because we've got a lot of... I mean, you talk about our organic opportunities. Yeah, and as it relates to Jacobs, you know, for us, we're very confident in terms of the organic growth story. You know, we've seen the guidance raised in fiscal 2026, and obviously, pipeline is pretty strong, and our book-to-bill is pretty strong. So our, you know, in terms of capital allocation, our first priority is continue to invest in the organic growth. And then, you know, as it was indicated in the polling, we've been very, very aggressive buyers of our stock. We think it's a tremendous value, and we've been returning well over 100% of our free cash flow last year, and committed to returning at least 65% this year. We're already on track to exceed that. And then ultimately, you know, we will look at M&A, but it's probably not something in the short to medium term. You know, PA is the near-term focus, but we feel really good about our long-term organic growth, and that's gonna be the primary use of cash in addition to the share repurchases. And also on the dividend front, you know, we've grown our dividend by, you know, 10%+ over the last five years, and we just raised our dividend recently to a 12.5% year-on-year increase, so very, very committed to capital returns as well. Great. You know, Adam, a real... I think a good example, there's a lot happening in the energy and power space right now. Mm-hmm. And some very deals that have some very high multiples that are related with them. Just kinda how we've been growing organically in that same space, in the energy and power space, is that the U.S. business right now is growing at clear double digits in energy and power organically, and we have been scaling with pretty significant levels of hiring that's going on in the Philippines and in India. Mm. Right? So this isn't outsourced engineering or, you know, you take the job to a certain point, and you put production engineering in a different location. This is scaling on an organic basis where the talent is and combining them with global talent in front of the client and creating, you know, a business. That business, three years ago in the US, barely, barely a business, right? So those are things where we've got great opportunities organically. I appreciate you adding that color there. So maybe to button this all up, we start with the long term. We'll end with the long term a little bit. When you think about getting to that 16%+, you know, adjusted EBITDA margins by the end of the decade, I mean, what are the two or three most important, you know, structural drivers that you think will get there? Yeah, so several things. So we said we'll get to 16%+ by fiscal 2029. We're well on our way to get there. I mean, obviously, this year, last year, we did 110 basis point increase in EBITDA margin, which is probably one of the highest in the industry, if not the highest. This year and in subsequent years, we've talked about 50 to 80 basis points. So the primary drivers of that would be, number one, operating leverage. We're making a commitment to grow the OpEx at a substantially slower pace than the revenue growth, so that's gonna continue to drive margin expansion. And then, we've called out as specific drivers in terms of gross margin expansion, in terms of, you know, how we do more global delivery, especially as it relates to some of these life sciences and advanced manufacturing and water-related projects. That'll be a good boost to our margins. And then, in addition to that, the commercial mix of our business is also growing. So multiple aspects to our margin expansion story, and we feel really good about reaching those targets by fiscal 2029, if not sooner. Great. Thank you, Venk, and thank you, Bob. Sure. Let's give them a round of applause, and thanks so much for being here. Yeah, thanks. Thank you. All right. Thank you.

Speaker 1: All right, hate to interrupt the smooth jazz, but we'll get going here. So, so my name's Adam Seiden, and I lead the U.S. Machinery and Construction effort here at Barclays. Thanks for joining us again for the Industrials Conference. So for this session here, we have the folks from Jacobs. So, we have both Bob and Venk, CEO and CFO, so really excited for these guys to be joining us. For the format of this session, like a lot of the others here at the conference, we'll be doing a fireside chat. We do invite your participation, though, through the gadgets that are on your tables there, where we'll be taking some questions for the audience. So certainly, welcome your participation. So with that, Team Jacobs, welcome back to Miami. All right, hate to interrupt the smooth jazz, but we'll get going here. all right hate to interrupt the smooth jazz but we'll get going here So, so my name's Adam Seiden, and I lead the U.S. so so my name's adam seiden and i lead the u.s Machinery and Construction effort here at Barclays. machinery and construction effort here at barclays Thanks for joining us again for the Industrials Conference. thanks for joining us again for the industrials conference So for this session here, we have the folks from Jacobs. so for this session here we have the folks from jacobs So, we have both Bob and Venk, CEO and CFO, so really excited for these guys to be joining us. so we have both bob and venk ceo and cfo so really excited for these guys to be joining us For the format of this session, like a lot of the others here at the conference, we'll be doing a fireside chat. for the format of this session like a lot of the others here at the conference we'll be doing a fireside chat We do invite your participation, though, through the gadgets that are on your tables there, where we'll be taking some questions for the audience. we do invite your participation though through the gadgets that are on your tables there where we'll be taking some questions for the audience So certainly, welcome your participation. so certainly welcome your participation So with that, Team Jacobs, welcome back to Miami. so with that team jacobs welcome back to miami

Speaker 2: Thanks, Adam. Thanks, Adam. thanks adam

Speaker 3: Thank you. Thank you. thank you

Speaker 2: Thanks for having us. Thanks for having us. thanks for having us

Speaker 1: Well, you got it, and always good to have you guys here. So last year in Miami, actually, you guys were here for this conference, but you were also here for some other things as well, including your Investor Day. So, back, back at the Investor Day, one of the takeaways you were talking about, like, y- redefining the asset cycle, or asset life cycle, sorry, and moving towards, you know, higher value services. So I guess here we are, one year later, you know, what progress have you made in that transition? And, you know, what tangible changes can we expect over the next couple of years here? Well, you got it, and always good to have you guys here. well you got it and always good to have you guys here So last year in Miami, actually, you guys were here for this conference, but you were also here for some other things as well, including your Investor Day. so last year in miami actually you guys were here for this conference but you were also here for some other things as well including your investor day So, back, back at the Investor Day, one of the takeaways you were talking about, like, y- redefining the asset cycle, or asset life cycle, sorry, and moving towards, you know, higher value services. so back back at the investor day one of the takeaways you were talking about like y- redefining the asset cycle or asset life cycle sorry and moving towards you know higher value services So I guess here we are, one year later, you know, what progress have you made in that transition? so i guess here we are one year later you know what progress have you made in that transition And, you know, what tangible changes can we expect over the next couple of years here? and you know what tangible changes can we expect over the next couple of years here

Speaker 2: Yeah. So, so Adam, I'd say we've made tremendous progress along that effort. The good news is that when we said redefining the asset life cycle, we've always been in the business of driving client outcomes. But, but in certain cases and in other cases, we haven't necessarily had the ability to influence in an earlier stage of of a client's capital decision-making process in order to to deliver that outcome, right? So, so that was kind of the the origins, but it wasn't coming from scratch. We'd had we had a bit of a a runway beforehand. Yeah. yeah So, so Adam, I'd say we've made tremendous progress along that effort. so so adam i'd say we've made tremendous progress along that effort The good news is that when we said redefining the asset life cycle, we've always been in the business of driving client outcomes. the good news is that when we said redefining the asset life cycle we've always been in the business of driving client outcomes But, but in certain cases and in other cases, we haven't necessarily had the ability to influence in an earlier stage of of a client's capital decision-making process in order to to deliver that outcome, right? but but in certain cases and in other cases we haven't necessarily had the ability to influence in an earlier stage of of a client's capital decision-making process in order to to deliver that outcome right So, so that was kind of the the origins, but it wasn't coming from scratch. so so that was kind of the the origins but it wasn't coming from scratch We'd had we had a bit of a a runway beforehand. we'd had we had a bit of a a runway beforehand Since the Investor Day, we've made great progress, I think, demonstrated by our financial results over the course of the last Q4, and culminating last quarter and probably one of the best quarters that we've had in recent history. Going back, been with the company for 20 years, and I think that's probably one of the best quarters we've ever had. But it wasn't by chance, and it wasn't a one-off. It really was a build-up of this, what's happening in our end markets, specifically in places like life sciences and advanced manufacturing and the water sector, as well as our international business. It's kind of been a nice and a nice nugget in front of us. Since the Investor Day, we've made great progress, I think, demonstrated by our financial results over the course of the last Q4 , and culminating last quarter and probably one of the best quarters that we've had in recent history. since the investor day we've made great progress i think demonstrated by our financial results over the course of the last q4 and culminating last quarter and probably one of the best quarters that we've had in recent history Going back, been with the company for 20 years, and I think that's probably one of the best quarters we've ever had. going back been with the company for 20 years and i think that's probably one of the best quarters we've ever had But it wasn't by chance, and it wasn't a one-off. but it wasn't by chance and it wasn't a one-off It really was a build-up of this, what's happening in our end markets, specifically in places like life sciences and advanced manufacturing and the water sector, as well as our international business. it really was a build-up of this what's happening in our end markets specifically in places like life sciences and advanced manufacturing and the water sector as well as our international business It's kind of been a nice and a nice nugget in front of us. it's kind of been a nice and a nice nugget in front of us Really delivering to long-term client relationships and getting involved very, very early in that decision-making phase. It's gone well. Really delivering to long-term client relationships and getting involved very, very early in that decision-making phase. really delivering to long-term client relationships and getting involved very very early in that decision-making phase It's gone well. it's gone well

Speaker 1: Great. Talking a little bit about the, the portfolio and really the backlog here. The backlog is at very nice record levels there. How would you, you know, how would you characterize the duration, the margin profile, and really the risk that you guys are taking within those contracts in the backlog today versus, you know, where you'd want it to be? Great. great Talking a little bit about the, the portfolio and really the backlog here. talking a little bit about the the portfolio and really the backlog here The backlog is at very nice record levels there. the backlog is at very nice record levels there How would you, you know, how would you characterize the duration, the margin profile, and really the risk that you guys are taking within those contracts in the backlog today versus, you know, where you'd want it to be? how would you you know how would you characterize the duration the margin profile and really the risk that you guys are taking within those contracts in the backlog today versus you know where you'd want it to be

Speaker 2: Yeah. Maybe I'll have Venk talk a little bit about kind of the profile of the backlog, but maybe I'll address the risk comment. Just to be clear, we are not taking on added risk as a result of getting kind of the full program delivery for these jobs. We have a long history in full program delivery in life sciences and in the water sector. Now, with the speed that's required around very complex AI data centers, that level of delivery certainty at scale is what our data center clients are asking us for, but the risk posture is the same. Yeah. yeah Maybe I'll have Venk talk a little bit about kind of the profile of the backlog, but maybe I'll address the risk comment. maybe i'll have venk talk a little bit about kind of the profile of the backlog but maybe i'll address the risk comment Just to be clear, we are not taking on added risk as a result of getting kind of the full program delivery for these jobs. just to be clear we are not taking on added risk as a result of getting kind of the full program delivery for these jobs We have a long history in full program delivery in life sciences and in the water sector. we have a long history in full program delivery in life sciences and in the water sector Now, with the speed that's required around very complex AI data centers, that level of delivery certainty at scale is what our data center clients are asking us for, but the risk posture is the same. now with the speed that's required around very complex ai data centers that level of delivery certainty at scale is what our data center clients are asking us for but the risk posture is the same

Speaker 1: Okay. Okay. okay

Speaker 3: Yeah, and then just on the backlog, you know, I'd say obviously, last quarter was a, you know, tremendous quarter in terms of our book-to-bill being 2.0. But when you look at it from a trailing twelve-month perspective, it's been rising pretty steadily, you know, from 1.2 a few quarters back now to 1.4. So we feel really good about the, the growing book of business, and it's very representative of our overall end market exposure. As you know, you know, 50% critical infrastructure, about 25% in life sciences and advanced manufacturing, and then the other 25% in water and environmental. So it's a fairly good representation of our end market exposure, and that's what we see. Yeah, and then just on the backlog, you know, I'd say obviously, last quarter was a, you know, tremendous quarter in terms of our book-to-bill being 2.0. yeah and then just on the backlog you know i'd say obviously last quarter was a you know tremendous quarter in terms of our book-to-bill being 2.0 But when you look at it from a trailing twelve-month perspective, it's been rising pretty steadily, you know, from 1.2 a few quarters back now to 1.4. but when you look at it from a trailing twelve-month perspective it's been rising pretty steadily you know from 1.2 a few quarters back now to 1.4 So we feel really good about the, the growing book of business, and it's very representative of our overall end market exposure. so we feel really good about the the growing book of business and it's very representative of our overall end market exposure As you know, you know, 50% critical infrastructure, about 25% in life sciences and advanced manufacturing, and then the other 25% in water and environmental. as you know you know 50% critical infrastructure about 25% in life sciences and advanced manufacturing and then the other 25% in water and environmental So it's a fairly good representation of our end market exposure, and that's what we see. so it's a fairly good representation of our end market exposure and that's what we see If anything, we're seeing, you know, higher growth in our life sciences and advanced manufacturing, driven by not only some of the work that we're doing for the GLP manufacturers, but also what we're seeing in the data center side. So overall, we feel pretty good about the backlog and continuing to grow it, and in terms of the pipeline, visibility is pretty strong. If anything, we're seeing, you know, higher growth in our life sciences and advanced manufacturing, driven by not only some of the work that we're doing for the GLP manufacturers, but also what we're seeing in the data center side. if anything we're seeing you know higher growth in our life sciences and advanced manufacturing driven by not only some of the work that we're doing for the glp manufacturers but also what we're seeing in the data center side So overall, we feel pretty good about the backlog and continuing to grow it, and in terms of the pipeline, visibility is pretty strong. so overall we feel pretty good about the backlog and continuing to grow it and in terms of the pipeline visibility is pretty strong

Speaker 1: If I could just put a fine point on the backlog, and you talked a little bit about the 2.0, you know, in Q1 so far. So as we think about, you know, through the year, a book-to-bill of, you know, 1 or above, is that a reasonable expectation for this year? If I could just put a fine point on the backlog, and you talked a little bit about the 2.0, you know, in Q1 so far. if i could just put a fine point on the backlog and you talked a little bit about the 2.0 you know in q1 so far So as we think about, you know, through the year, a book-to-bill of, you know, 1 or above, is that a reasonable expectation for this year? so as we think about you know through the year a book-to-bill of you know 1 or above is that a reasonable expectation for this year

Speaker 3: Yeah. I think, you know, obviously, we're not gonna print 2.0 every quarter, but, suffice it to say that the trend has been up and to the right, and we have good visibility in terms of the pipeline looking ahead as well. Yeah. yeah I think, you know, obviously, we're not gonna print 2.0 every quarter, but, suffice it to say that the trend has been up and to the right, and we have good visibility in terms of the pipeline looking ahead as well. i think you know obviously we're not gonna print 2.0 every quarter but suffice it to say that the trend has been up and to the right and we have good visibility in terms of the pipeline looking ahead as well

Speaker 1: Great. So there's the backlog, kind of like sets the table for what's to come. Obviously, there's the burn of the backlog, and you guys were talking a bit about your revenue guidance. You did raise that a little bit. So I guess the simple question first is just essentially what determines if we land on the more mid-single-digit side versus kind of that, you know, the higher end of the revenue guidance? Great. great So there's the backlog, kind of like sets the table for what's to come. so there's the backlog kind of like sets the table for what's to come Obviously, there's the burn of the backlog, and you guys were talking a bit about your revenue guidance. obviously there's the burn of the backlog and you guys were talking a bit about your revenue guidance You did raise that a little bit. you did raise that a little bit So I guess the simple question first is just essentially what determines if we land on the more mid-single-digit side versus kind of that, you know, the higher end of the revenue guidance? so i guess the simple question first is just essentially what determines if we land on the more mid-single-digit side versus kind of that you know the higher end of the revenue guidance

Speaker 2: Yeah. I'd say the pace of play on some of our more tech manufacturing-centric jobs. You know, we didn't want to overcommit on what that velocity was gonna be on those jobs. As well as there's a bit of a ramping that we need to do in Q2. So the H2 kind of looks better, but that was, that was... It was the Q1. We knew that we were going to raise guidance after the Q1, but we were just taking a, you know, pragmatic view in case when things go either way. Yeah. yeah I'd say the pace of play on some of our more tech manufacturing-centric jobs. i'd say the pace of play on some of our more tech manufacturing-centric jobs You know, we didn't want to overcommit on what that velocity was gonna be on those jobs. you know we didn't want to overcommit on what that velocity was gonna be on those jobs As well as there's a bit of a ramping that we need to do in Q2. as well as there's a bit of a ramping that we need to do in q2 So the H2 kind of looks better, but that was, that was... so the h2 kind of looks better but that was that was It was the Q1 . it was the q1 We knew that we were going to raise guidance after the Q1 , but we were just taking a, you know, pragmatic view in case when things go either way. we knew that we were going to raise guidance after the q1 but we were just taking a you know pragmatic view in case when things go either way

Speaker 1: Got it. In Q4, there's an extra week as well that- Got it. got it In Q4, there's an extra week as well that- in q4 there's an extra week as well that-

Speaker 2: Sure. Sure. sure

Speaker 1: Helps out too. Helps out too. helps out too

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Okay. If we think about, like, the mix within the backlog, there has been within several large awards, they've carried, you know, a higher pass-through, so forth in revenue. How-- Can you just talk through a little bit of that dynamic and what that means for, you know, for Jacobs' book of business and how that will impact, you know, how that flows through to the P&L? Okay. okay If we think about, like, the mix within the backlog, there has been within several large awards, they've carried, you know, a higher pass-through, so forth in revenue. if we think about like the mix within the backlog there has been within several large awards they've carried you know a higher pass-through so forth in revenue How-- Can you just talk through a little bit of that dynamic and what that means for, you know, for Jacobs' book of business and how that will impact, you know, how that flows through to the P&L? how-- can you just talk through a little bit of that dynamic and what that means for you know for jacobs' book of business and how that will impact you know how that flows through to the p&l

Speaker 2: Sure, sure. So I talked earlier about kind of the speed required around certain of our our life sciences and now data center clients, as well as in semi. But in semi, you know, we were really a an engineer and a design consultant in that space, do a lot of it. But that's kinda where we've stuck to our knitting there. On the data center component, you know, some customers, like the hyperscalers, have sophisticated capital projects teams. Interestingly enough, most of them come from our end of the sector anyway, so our end of the food chain or supply chain. Sure, sure. sure sure So I talked earlier about kind of the speed required around certain of our our life sciences and now data center clients, as well as in semi. so i talked earlier about kind of the speed required around certain of our our life sciences and now data center clients as well as in semi But in semi, you know, we were really a an engineer and a design consultant in that space, do a lot of it. but in semi you know we were really a an engineer and a design consultant in that space do a lot of it But that's kinda where we've stuck to our knitting there. but that's kinda where we've stuck to our knitting there On the data center component, you know, some customers, like the hyperscalers, have sophisticated capital projects teams. on the data center component you know some customers like the hyperscalers have sophisticated capital projects teams Interestingly enough, most of them come from our end of the sector anyway, so our end of the food chain or supply chain. interestingly enough most of them come from our end of the sector anyway so our end of the food chain or supply chain But some of our data center clients, like neo-cloud providers, know a lot about data centers and the technology and what's going on within the, within the racks, but might not have project delivery expertise as well. That's the case, with the large award that we announced with Hut 8. They're a neo-cloud provider. Clients, you know, are, are gonna be Anthropic. FluidStack is gonna be the operator. Google is the investor. JPMorgan and Goldman Sachs are both the, the, the investor or the, the creditor. Came to us with a full program delivery, partnership, where we would procure on their behalf, equipment, subcontractors, and the like, and then have back-to-back terms with them and pass through that revenue. But some of our data center clients, like neo-cloud providers, know a lot about data centers and the technology and what's going on within the, within the racks, but might not have project delivery expertise as well. but some of our data center clients like neo-cloud providers know a lot about data centers and the technology and what's going on within the within the racks but might not have project delivery expertise as well That's the case, with the large award that we announced with Hut 8. that's the case with the large award that we announced with hut 8 They're a neo-cloud provider. they're a neo-cloud provider Clients, you know, are, are gonna be Anthropic. clients you know are are gonna be anthropic FluidStack is gonna be the operator. fluidstack is gonna be the operator Google is the investor. google is the investor JP Morgan and Goldman Sachs are both the, the, the investor or the, the creditor. jp morgan and goldman sachs are both the the the investor or the the creditor Came to us with a full program delivery, partnership, where we would procure on their behalf, equipment, subcontractors, and the like, and then have back-to-back terms with them and pass through that revenue. came to us with a full program delivery partnership where we would procure on their behalf equipment subcontractors and the like and then have back-to-back terms with them and pass through that revenue

Speaker 1: Great. And, and you just brought up data centers, and, I'm sure we'll talk about it a bit, throughout the conversation and advanced facilities work. So maybe just, the level of growth that we've seen in advanced facilities, whether that's, you know, life sciences, semi data, and- Great. great And, and you just brought up data centers, and, I'm sure we'll talk about it a bit, throughout the conversation and advanced facilities work. and and you just brought up data centers and i'm sure we'll talk about it a bit throughout the conversation and advanced facilities work So maybe just, the level of growth that we've seen in advanced facilities, whether that's, you know, life sciences, semi data, and- so maybe just the level of growth that we've seen in advanced facilities whether that's you know life sciences semi data and-

Speaker 2: Yeah Yeah yeah

Speaker 1: ... et cetera. How sustainable are those growth levels? And then, maybe if you could just talk to us as far as how big of an impact is data centers on the business today? ... et cetera. et cetera How sustainable are those growth levels? how sustainable are those growth levels And then, maybe if you could just talk to us as far as how big of an impact is data centers on the business today? and then maybe if you could just talk to us as far as how big of an impact is data centers on the business today

Speaker 2: Yeah. Well, short answer on sustainability of those end markets- Yeah. yeah Well, short answer on sustainability of those end markets- well short answer on sustainability of those end markets-

Speaker 1: Yeah Yeah yeah

Speaker 2: ... we believe that they are sustainable. If I go back 10 years, 20 years, you know, it was a very cyclical market, where you'd have a novel therapy or a molecule, it'd get to market, and then there was a lot of consolidation happening in the biotech world. You know, today, with AI and drug discovery, these molecules are coming to market faster than before, and if you hear any of the CEOs of the large biotechs, count how many times they talk about capacity being the limiting factor with regards to manufacturing. And so I'd say that sustainability we see before we would have 6 to 9 to 12 months of visibility, we now have 24 months of pipeline- ... we believe that they are sustainable. we believe that they are sustainable If I go back 10 years, 20 years, you know, it was a very cyclical market, where you'd have a novel therapy or a molecule, it'd get to market, and then there was a lot of consolidation happening in the biotech world. if i go back 10 years 20 years you know it was a very cyclical market where you'd have a novel therapy or a molecule it'd get to market and then there was a lot of consolidation happening in the biotech world You know, today, with AI and drug discovery, these molecules are coming to market faster than before, and if you hear any of the CEOs of the large biotechs, count how many times they talk about capacity being the limiting factor with regards to manufacturing. you know today with ai and drug discovery these molecules are coming to market faster than before and if you hear any of the ceos of the large biotechs count how many times they talk about capacity being the limiting factor with regards to manufacturing And so I'd say that sustainability we see before we would have 6 to 9 to 12 months of visibility, we now have 24 months of pipeline- and so i'd say that sustainability we see before we would have 6 to 9 to 12 months of visibility we now have 24 months of pipeline-

Speaker 1: Mm Mm mm

Speaker 2: ... visibility by line item. So I'd say it's, it's, it's strong there. The second around data centers, and it's an interesting dynamic. We talk about data centers as the, the ultimate, facility, but if you look at where Jacobs plays, we're playing across the AI infrastructure. So high bandwidth memory on the chips, we design those facilities. The utility requirements that are gonna be needed for the data center, driven by what's going on with the chip, you know, we're in the middle of that with power and water. And then the actual data center itself is, is innovating in real time. What gives us confidence that there's sustainability there? We have an exclusive partnership with NVIDIA- ... visibility by line item. visibility by line item So I'd say it's, it's, it's strong there. so i'd say it's it's it's strong there The second around data centers, and it's an interesting dynamic. the second around data centers and it's an interesting dynamic We talk about data centers as the, the ultimate, facility, but if you look at where Jacobs plays, we're playing across the AI infrastructure. we talk about data centers as the the ultimate facility but if you look at where jacobs plays we're playing across the ai infrastructure So high bandwidth memory on the chips, we design those facilities. so high bandwidth memory on the chips we design those facilities The utility requirements that are gonna be needed for the data center, driven by what's going on with the chip, you know, we're in the middle of that with power and water. the utility requirements that are gonna be needed for the data center driven by what's going on with the chip you know we're in the middle of that with power and water And then the actual data center itself is, is innovating in real time. and then the actual data center itself is is innovating in real time What gives us confidence that there's sustainability there? what gives us confidence that there's sustainability there We have an exclusive partnership with NVIDIA- we have an exclusive partnership with nvidia-

Speaker 1: Yeah Yeah yeah

Speaker 2: ... where we're doing digital twinning and simulation models on next-generation chips, in the virtual world and seeing what kind of requirements are there and how fast these things are getting to market, which kinda gives a runway on that side as well. ... where we're doing digital twinning and simulation models on next-generation chips, in the virtual world and seeing what kind of requirements are there and how fast these things are getting to market, which kinda gives a runway on that side as well. where we're doing digital twinning and simulation models on next-generation chips in the virtual world and seeing what kind of requirements are there and how fast these things are getting to market which kinda gives a runway on that side as well

Speaker 3: Then, Adam, to your question about the size of the data center business, we've called it out to be about roughly 3-3.5% of our revenues, but it's growing at a very, very fast clip, you know, almost double in the last couple of years, and we see that pipeline continuing to grow. Then, to Bob's earlier point, the level of engagement that we have in the data center, the scope of engagement has gone up quite dramatically. So to the extent that few years ago, what would have been our, you know, work in the design of the innards of the data center, now has become a much more comprehensive, soup to nut solution, all the way from site selection to the power needs, the water needs, and ultimately, you know, implementing the data center in its entirety. Then, Adam, to your question about the size of the data center business, we've called it out to be about roughly 3-3.5% of our revenues, but it's growing at a very, very fast clip, you know, almost double in the last couple of years, and we see that pipeline continuing to grow. then adam to your question about the size of the data center business we've called it out to be about roughly 3-3.5% of our revenues but it's growing at a very very fast clip you know almost double in the last couple of years and we see that pipeline continuing to grow Then, to Bob's earlier point, the level of engagement that we have in the data center, the scope of engagement has gone up quite dramatically. then to bob's earlier point the level of engagement that we have in the data center the scope of engagement has gone up quite dramatically So to the extent that few years ago, what would have been our, you know, work in the design of the innards of the data center, now has become a much more comprehensive, soup to nut solution, all the way from site selection to the power needs, the water needs, and ultimately, you know, implementing the data center in its entirety. so to the extent that few years ago what would have been our you know work in the design of the innards of the data center now has become a much more comprehensive soup to nut solution all the way from site selection to the power needs the water needs and ultimately you know implementing the data center in its entirety The scope has increased by almost an order of magnitude for us. The scope has increased by almost an order of magnitude for us. the scope has increased by almost an order of magnitude for us

Speaker 2: Yeah, and, and I just wanna clarify. Yeah, and, and I just wanna clarify. yeah and and i just wanna clarify

Speaker 3: Yeah. Yeah. yeah

Speaker 2: 3% is that last phase of the AI infrastructure chain, is the boundary limits of the data center. If you were to add on the utilities and add on what we're doing in the chip manufacturing space, that number probably goes to 10%-ish, so it's, it's, it's growing fast. 3% is that last phase of the AI infrastructure chain, is the boundary limits of the data center. 3% is that last phase of the ai infrastructure chain is the boundary limits of the data center If you were to add on the utilities and add on what we're doing in the chip manufacturing space, that number probably goes to 10%-ish, so it's, it's, it's growing fast. if you were to add on the utilities and add on what we're doing in the chip manufacturing space that number probably goes to 10%-ish so it's it's it's growing fast

Speaker 1: Got it. So, so maybe, thinking through from the Analyst Day, a little bit from last year, you were targeting global delivery and cross-collaboration, increasing from, you know, call it around 40% over, you know, 50%, closer to the end of the decade. So what progress did you guys make on that in FY 2025, and then what are the drivers from here? Got it. got it So, so maybe, thinking through from the Analyst Day, a little bit from last year, you were targeting global delivery and cross-collaboration, increasing from, you know, call it around 40% over, you know, 50%, closer to the end of the decade. so so maybe thinking through from the analyst day a little bit from last year you were targeting global delivery and cross-collaboration increasing from you know call it around 40% over you know 50% closer to the end of the decade So what progress did you guys make on that in FY 2025, and then what are the drivers from here? so what progress did you guys make on that in fy 2025 and then what are the drivers from here

Speaker 2: Yeah, I'd say FY 2025 and the Q1 of 2026, we've made great progress. I think, yeah, we've made great progress on that. I don't wanna, I don't wanna jinx us just yet, but those targets that we put out might have already been surpassed. Yeah, I'd say FY 2025 and the Q1 of 2026, we've made great progress. yeah i'd say fy 2025 and the q1 of 2026 we've made great progress I think, yeah, we've made great progress on that. i think yeah we've made great progress on that I don't wanna, I don't wanna jinx us just yet, but those targets that we put out might have already been surpassed. i don't wanna i don't wanna jinx us just yet but those targets that we put out might have already been surpassed

Speaker 1: Okay. Okay. okay

Speaker 2: Yeah. Yeah. yeah

Speaker 1: That would be pretty quick. All right. So we're talking a little bit about AI. That would be pretty quick. that would be pretty quick All right. all right So we're talking a little bit about AI. so we're talking a little bit about ai

Speaker 2: Yeah. Yeah. yeah

Speaker 1: and so for- and so for- and so for-

Speaker 2: Really, I didn't actually notice. Really, I didn't actually notice. really i didn't actually notice

Speaker 1: Are you getting any questions? Are you getting any questions? are you getting any questions

Speaker 3: Yeah. Yeah. yeah

Speaker 1: So, first, let's talk about some of the tools and solutions. So, first, let's talk about some of the tools and solutions. so first let's talk about some of the tools and solutions

Speaker 2: Yeah Yeah yeah

Speaker 1: ... for yourself. So, you know, you've got your own sets of tools, and you're using, like, Acuity, Engage AI, and using that to deliver. How do you monetize those capabilities? Is it through margin expansion, win rates, larger projects? Just curious, like, how does that flow through for Jacobs? ... for yourself. for yourself So, you know, you've got your own sets of tools, and you're using, like, Acuity, Engage AI, and using that to deliver. so you know you've got your own sets of tools and you're using like acuity engage ai and using that to deliver How do you monetize those capabilities? how do you monetize those capabilities Is it through margin expansion, win rates, larger projects? is it through margin expansion win rates larger projects Just curious, like, how does that flow through for Jacobs? just curious like how does that flow through for jacobs

Speaker 2: Yeah, all of the above. All of the above. Really, you know, how many basis points of margin expansion using AI is delivering? It's tough to measure because it's become such an integral part of how we deliver engagements, programs, projects. We've been on this journey for nearly seven years, and it started with digital enablement. We did a lot of design automation, as well as take the data analysis phase of what we do and really programmed in a lot of efficiencies there. Now we're moving into AI in a material way, not only for ourselves, like those items you said, as well as our sales process, a lot of the corporate functions groups, but more so for our clients' business. Yeah, all of the above. yeah all of the above All of the above. all of the above Really, you know, how many basis points of margin expansion using AI is delivering? really you know how many basis points of margin expansion using ai is delivering It's tough to measure because it's become such an integral part of how we deliver engagements, programs, projects. it's tough to measure because it's become such an integral part of how we deliver engagements programs projects We've been on this journey for nearly seven years, and it started with digital enablement. we've been on this journey for nearly seven years and it started with digital enablement We did a lot of design automation, as well as take the data analysis phase of what we do and really programmed in a lot of efficiencies there. we did a lot of design automation as well as take the data analysis phase of what we do and really programmed in a lot of efficiencies there Now we're moving into AI in a material way, not only for ourselves, like those items you said, as well as our sales process, a lot of the corporate functions groups, but more so for our clients' business. now we're moving into ai in a material way not only for ourselves like those items you said as well as our sales process a lot of the corporate functions groups but more so for our clients' business But if you look at the 32, 33 AI, AI-enabled platforms that we deliver for our clients, they're driving efficiencies for our clients, predominantly in the water sector, in the life sciences sector, and now we're deploying it on delivery of data centers as well. But we wouldn't be able to do those jobs had we not had those, those digital tools. Right? So, so said another way, AI and the, the digital enablement in a resource constraint, I mean, we're, we're significantly resource constraint- But if you look at the 32, 33 AI, AI-enabled platforms that we deliver for our clients, they're driving efficiencies for our clients, predominantly in the water sector, in the life sciences sector, and now we're deploying it on delivery of data centers as well. but if you look at the 32 33 ai ai-enabled platforms that we deliver for our clients they're driving efficiencies for our clients predominantly in the water sector in the life sciences sector and now we're deploying it on delivery of data centers as well But we wouldn't be able to do those jobs had we not had those, those digital tools. but we wouldn't be able to do those jobs had we not had those those digital tools Right? right So, so said another way, AI and the, the digital enablement in a resource constraint, I mean, we're, we're significantly resource constraint- so so said another way ai and the the digital enablement in a resource constraint i mean we're we're significantly resource constraint-

Speaker 3: Sure Sure sure

Speaker 2: is driving growth, headcount, billable hours, and revenue. is driving growth, headcount, billable hours, and revenue. is driving growth headcount billable hours and revenue

Speaker 3: Adam, another important part of all our software and digital capabilities is the fact that it allows us to get a lot more stickiness with our customers, so we have, you know, multi-year contracts. Obviously, from a margin perspective, even though it doesn't show up in the, in the top line, it does have, you know, substantially accretive margins relative to our overall business. Over time, you know, it has a very, very positive impact on both margins and stickiness and ultimately drives, you know, additional revenue growth over time. Adam, another important part of all our software and digital capabilities is the fact that it allows us to get a lot more stickiness with our customers, so we have, you know, multi-year contracts. adam another important part of all our software and digital capabilities is the fact that it allows us to get a lot more stickiness with our customers so we have you know multi-year contracts Obviously, from a margin perspective, even though it doesn't show up in the, in the top line, it does have, you know, substantially accretive margins relative to our overall business. obviously from a margin perspective even though it doesn't show up in the in the top line it does have you know substantially accretive margins relative to our overall business Over time, you know, it has a very, very positive impact on both margins and stickiness and ultimately drives, you know, additional revenue growth over time. over time you know it has a very very positive impact on both margins and stickiness and ultimately drives you know additional revenue growth over time

Speaker 2: Got it. And- Got it. got it And- and-

Speaker 3: Go, you... No, Bob. Go, you... go you No, Bob. no bob

Speaker 2: Just because I know it's probably front of mind of a lot of people in the room right now. Just because I know it's probably front of mind of a lot of people in the room right now. just because i know it's probably front of mind of a lot of people in the room right now

Speaker 3: Yeah, that's where we're going. Yeah, that's where we're going. yeah that's where we're going

Speaker 2: Yeah, exactly. Yeah. So why? Yeah, exactly. yeah exactly Yeah. yeah So why? so why

Speaker 3: Yeah. Yeah. yeah

Speaker 2: What—why not the, the Silicon Valley firm that can gather as much data as we have over the course of the last 40 years, come up with their own LLM, and, and, and basically, you know, eradicate an entire sector, right? A couple of things. One, access to that data is not as simple as possible. These are unstructured data that has been developed over hundreds of thousands of projects over 40 years, measured in... I'm not that so tech-savvy, in terabytes- What—why not the, the Silicon Valley firm that can gather as much data as we have over the course of the last 40 years, come up with their own LLM, and, and, and basically, you know, eradicate an entire sector, right? what—why not the the silicon valley firm that can gather as much data as we have over the course of the last 40 years come up with their own llm and and and basically you know eradicate an entire sector right A couple of things. a couple of things One, access to that data is not as simple as possible. one access to that data is not as simple as possible These are unstructured data that has been developed over hundreds of thousands of projects over 40 years, measured in... these are unstructured data that has been developed over hundreds of thousands of projects over 40 years measured in I'm not that so tech-savvy, in terabytes- i'm not that so tech-savvy in terabytes-

Speaker 3: Yeah Yeah yeah

Speaker 2: or zettabytes or whatever. It's a lot of data. or zettabytes or whatever. or zettabytes or whatever It's a lot of data. it's a lot of data

Speaker 3: Yeah. Yeah. yeah

Speaker 2: We've been working to take that unstructured data into structured form, create our own LLM, called Jacobs AI- We've been working to take that unstructured data into structured form, create our own LLM, called Jacobs AI- we've been working to take that unstructured data into structured form create our own llm called jacobs ai-

Speaker 3: Sure Sure sure

Speaker 2: ... put, you know, cyber protections around it, following all of the standards, codes, and regulations from around the world, right? And so that, that is, you know, that, that's something that doesn't happen overnight- ... put, you know, cyber protections around it, following all of the standards, codes, and regulations from around the world, right? put you know cyber protections around it following all of the standards codes and regulations from around the world right And so that, that is, you know, that, that's something that doesn't happen overnight- and so that that is you know that that's something that doesn't happen overnight-

Speaker 3: Yeah Yeah yeah

Speaker 2: One. Two is, knowing that AI is deterministic, looking backwards or, you know, what's been done, nothing that we're designing today looks the way it did before, and we're solving for future opportunities and future challenges, right? So it's a very, very dynamic world. Now, if a firm was in the commercial real estate building business- One. one Two is, knowing that AI is deterministic, looking backwards or, you know, what's been done, nothing that we're designing today looks the way it did before, and we're solving for future opportunities and future challenges, right? two is knowing that ai is deterministic looking backwards or you know what's been done nothing that we're designing today looks the way it did before and we're solving for future opportunities and future challenges right So it's a very, very dynamic world. so it's a very very dynamic world Now, if a firm was in the commercial real estate building business- now if a firm was in the commercial real estate building business-

Speaker 3: Yeah Yeah yeah

Speaker 2: and it was a static structure that continues to be the same as it's been for 50 years, could there be... and companies like Bentley and Autodesk and others who are suppliers to us- and it was a static structure that continues to be the same as it's been for 50 years, could there be... and companies like Bentley and Autodesk and others who are suppliers to us- and it was a static structure that continues to be the same as it's been for 50 years could there be and companies like bentley and autodesk and others who are suppliers to us-

Speaker 3: Yes Yes yes

Speaker 2: Are already innovating there. So I think that's where, you know, the client dialogue we're having right now is not around less billable hours or why do I need Adam, Bob, and Venk when I can just do it with Venk? We're not having those conversations. Our clients are asking us, "Hey, bring everything that you've got because we need this outcome as fast as we possibly can. Are already innovating there. are already innovating there So I think that's where, you know, the client dialogue we're having right now is not around less billable hours or why do I need Adam, Bob, and Venk when I can just do it with Venk? so i think that's where you know the client dialogue we're having right now is not around less billable hours or why do i need adam bob and venk when i can just do it with venk We're not having those conversations. we're not having those conversations Our clients are asking us, "Hey, bring everything that you've got because we need this outcome as fast as we possibly can. our clients are asking us "hey bring everything that you've got because we need this outcome as fast as we possibly can

Speaker 3: Got it. And based on what you're saying, you're not worried that the client conversation transitions into that over time? Got it. got it And based on what you're saying, you're not worried that the client conversation transitions into that over time? and based on what you're saying you're not worried that the client conversation transitions into that over time

Speaker 2: No. In fact, a lot of those 32 platforms that we're talking about, we co-created with our clients. No. no In fact, a lot of those 32 platforms that we're talking about, we co-created with our clients. in fact a lot of those 32 platforms that we're talking about we co-created with our clients

Speaker 3: Yeah. Yeah. yeah

Speaker 2: Things like AquaDNA that we've talked about in the past- Things like AquaDNA that we've talked about in the past- things like aquadna that we've talked about in the past-

Speaker 3: Sure Sure sure

Speaker 2: ... Intelligent O&M, you know, Flood Modeller, all of these tools we've co-created with our clients, right? So... ... Intelligent O&M, you know, Flood Modelle r, all of these tools we've co-created with our clients, right? intelligent o&m you know flood modelle r all of these tools we've co-created with our clients right So... so

Speaker 3: Yeah. So, so thinking of the portfolio a little bit in AI, so now you guys took a full ownership stake in PA. And with AI reshaping a little bit of- Yeah. yeah So, so thinking of the portfolio a little bit in AI, so now you guys took a full ownership stake in PA. so so thinking of the portfolio a little bit in ai so now you guys took a full ownership stake in pa And with AI reshaping a little bit of- and with ai reshaping a little bit of-

Speaker 2: Yeah Yeah yeah

Speaker 3: What's going on in the consulting world, so how does the PA plus Jacobs platform stack up competitively in that environment? What's going on in the consulting world, so how does the PA plus Jacobs platform stack up competitively in that environment? what's going on in the consulting world so how does the pa plus jacobs platform stack up competitively in that environment

Speaker 2: I think really strong. You know, you're right, consulting has now turned into a four-letter word. But really, if you look at the technical advisory component of client PA's ability to take clients on that digital journey from a science-based perspective. Remember, one of the big drivers around making the 65% investment in 2021 when Carlyle went to market with that 65% was their digital capabilities, coupled with the fact that these weren't folks coming from the financial world or the IT sector. They were science-based scientists and engineers and business-focused people that were taking digital enablement to transform businesses, understanding the science of the business, right? Which was a nice fit for Jacobs, as, you know, we could get deeper into the boardroom when decisions were being made. We learned a lot over the last five years. I think really strong. i think really strong You know, you're right, consulting has now turned into a four-letter word. you know you're right consulting has now turned into a four-letter word But really, if you look at the technical advisory component of client PA's ability to take clients on that digital journey from a science-based perspective. but really if you look at the technical advisory component of client pa's ability to take clients on that digital journey from a science-based perspective Remember, one of the big drivers around making the 65% investment in 2021 when Carlyle went to market with that 65% was their digital capabilities, coupled with the fact that these weren't folks coming from the financial world or the IT sector. remember one of the big drivers around making the 65% investment in 2021 when carlyle went to market with that 65% was their digital capabilities coupled with the fact that these weren't folks coming from the financial world or the it sector They were science-based scientists and engineers and business-focused people that were taking digital enablement to transform businesses, understanding the science of the business, right? they were science-based scientists and engineers and business-focused people that were taking digital enablement to transform businesses understanding the science of the business right Which was a nice fit for Jacobs, as, you know, we could get deeper into the boardroom when decisions were being made. which was a nice fit for jacobs as you know we could get deeper into the boardroom when decisions were being made We learned a lot over the last five years. we learned a lot over the last five years We just to, for everyone's education is that we made the investment. The company, 35% was owned by the employees, the partners, and then they had separate governance and was run independently. So imagine the Venn diagram. We went to market opportunistically when our skill sets matched, and we could drive a greater client outcome, and then we operated independently. We just to, for everyone's education is that we made the investment. we just to for everyone's education is that we made the investment The company, 35% was owned by the employees, the partners, and then they had separate governance and was run independently. the company 35% was owned by the employees the partners and then they had separate governance and was run independently So imagine the Venn diagram. so imagine the venn diagram We went to market opportunistically when our skill sets matched, and we could drive a greater client outcome, and then we operated independently. we went to market opportunistically when our skill sets matched and we could drive a greater client outcome and then we operated independently

Speaker 3: Mm-hmm. Mm-hmm. mm-hmm

Speaker 2: ... So now making this 35% investment, taking the learnings, five-year head start, we know where the talent is, combining our back offices, combining our pipelines, still having the PA brand. ... So now making this 35% investment, taking the learnings, five-year head start, we know where the talent is, combining our back offices, combining our pipelines, still having the PA brand. so now making this 35% investment taking the learnings five-year head start we know where the talent is combining our back offices combining our pipelines still having the pa brand

Speaker 1: Mm-hmm. Mm-hmm. mm-hmm

Speaker 2: And now that digital capability has grown with Jacobs and PA to now 2,000 people that are holistically centered in on digital, along with all of the other items of PA that PA brings. So we're really excited and saw some nice growth numbers coming out of PA as well. And now that digital capability has grown with Jacobs and PA to now 2,000 people that are holistically centered in on digital, along with all of the other items of PA that PA brings. and now that digital capability has grown with jacobs and pa to now 2,000 people that are holistically centered in on digital along with all of the other items of pa that pa brings So we're really excited and saw some nice growth numbers coming out of PA as well. so we're really excited and saw some nice growth numbers coming out of pa as well

Speaker 1: Definitely. Definitely. definitely

Speaker 3: And a financial model that's accretive to the Jacobs core business. So, you know, obviously, margins that are industry-leading at 22% and top line growth of 5 single digits that we feel pretty good about as well. And a financial model that's accretive to the Jacobs core business. and a financial model that's accretive to the jacobs core business So, you know, obviously, margins that are industry-leading at 22% and top line growth of 5 single digits that we feel pretty good about as well. so you know obviously margins that are industry-leading at 22% and top line growth of 5 single digits that we feel pretty good about as well

Speaker 1: Great. Thank you, Venk. Maybe we'll shift to the audience response questions here. So just as a reminder for the audience, when the questions come up, once the clock starts to go, that's, that's your cue. So the first one is, do you currently own the stock? Yes, overweight, market weight, underweight, or no? All right. 80% of the room says no. Next question: What is your general bias towards the stock right now? Positive, negative, or neutral? All right. About a little over half the room is neutral. Next question: In your opinion, through cycle, EPS growth for Jacobs will be, above peers, in line with peers, and below peers? Happy we have Jacobs Solutions, not engineering. I think we've done that before. All right, about 50% in line, 40% above. Great. great Thank you, Venk. thank you venk Maybe we'll shift to the audience response questions here. maybe we'll shift to the audience response questions here So just as a reminder for the audience, when the questions come up, once the clock starts to go, that's, that's your cue. so just as a reminder for the audience when the questions come up once the clock starts to go that's that's your cue So the first one is, do you currently own the stock? so the first one is do you currently own the stock Yes, overweight, market weight, underweight, or no? yes overweight market weight underweight or no All right. 80% of the room says no. all right 80% of the room says no Next question: What is your general bias towards the stock right now? next question what is your general bias towards the stock right now Positive, negative, or neutral? positive negative or neutral All right. all right About a little over half the room is neutral. about a little over half the room is neutral Next question: In your opinion, through cycle, EPS growth for Jacobs will be, above peers, in line with peers, and below peers? next question in your opinion through cycle eps growth for jacobs will be above peers in line with peers and below peers Happy we have Jacobs Solutions, not engineering. happy we have jacobs solutions not engineering I think we've done that before. i think we've done that before All right, about 50% in line, 40% above. all right about 50% in line 40% above Next question: In your opinion, what should Jacobs do with excess cash? Bolt on M&A, larger M&A, repos, divvies, debt pay down, or internal investment? Right after the PA conversation. All right, about 45% of the room says share repos. And I think our last one here is valuation. So in, in your optimism, what multiple of 26 earnings should... or optimism, geez, in your opinion, on what multiple of 26 earnings? Next question: In your opinion, what should Jacobs do with excess cash? next question in your opinion what should jacobs do with excess cash Bolt on M&A, larger M&A, repos, divvies, debt pay down, or internal investment? bolt on m&a larger m&a repos divvies debt pay down or internal investment Right after the PA conversation. right after the pa conversation All right, about 45% of the room says share repos. all right about 45% of the room says share repos And I think our last one here is valuation. and i think our last one here is valuation So in, in your optimism, what multiple of 26 earnings should... or optimism, geez, in your opinion, on what multiple of 26 earnings? so in in your optimism what multiple of 26 earnings should or optimism geez in your opinion on what multiple of 26 earnings

Speaker 2: Yeah, there you go. Yeah, there you go. yeah there you go

Speaker 1: Should Jacobs trade ranges from less than 10x to higher than 21x? All right, so it's about a third of the room each in the 16 to 18x and 19 to 21x camp. Should Jacobs trade ranges from less than 10x to higher than 21x? should jacobs trade ranges from less than 10x to higher than 21x All right, so it's about a third of the room each in the 16 to 18x and 19 to 21x camp. all right so it's about a third of the room each in the 16 to 18x and 19 to 21x camp

Speaker 3: Right. Right. right

Speaker 1: So it gives you that. So maybe thinking through a little bit of the base business, right? Everything that you do very well on the transportation side and the water side, et cetera. I guess I do have to ask the obligatory question just about what your view will be on reauthorization. And really just more so than forgetting about the policy view, it's more how does Jacobs, as a business, operate in a scenario where, like today, which we have the current program, and how does that influence at all, you know, your guys' ability to win work if we're in an extension scenario? So it gives you that. so it gives you that So maybe thinking through a little bit of the base business, right? so maybe thinking through a little bit of the base business right Everything that you do very well on the transportation side and the water side, et cetera. everything that you do very well on the transportation side and the water side et cetera I guess I do have to ask the obligatory question just about what your view will be on reauthorization. i guess i do have to ask the obligatory question just about what your view will be on reauthorization And really just more so than forgetting about the policy view, it's more how does Jacobs, as a business, operate in a scenario where, like today, which we have the current program, and how does that influence at all, you know, your guys' ability to win work if we're in an extension scenario? and really just more so than forgetting about the policy view it's more how does jacobs as a business operate in a scenario where like today which we have the current program and how does that influence at all you know your guys' ability to win work if we're in an extension scenario

Speaker 2: Yeah, I think the extension scenario probably the impact would be neutral for us. We've gone through this before. Even the original IIJA- Yeah, I think the extension scenario probably the impact would be neutral for us. yeah i think the extension scenario probably the impact would be neutral for us We've gone through this before. we've gone through this before Even the original IIJA- even the original iija-

Speaker 1: Yeah Yeah yeah

Speaker 2: - was delayed by nearly two years. - was delayed by nearly two years. - was delayed by nearly two years

Speaker 1: Yeah. Yeah. yeah

Speaker 2: So, you know, we're starting to see that continued trend. I think the number is 35% to 40% obligated and spent. So, you know, we're starting to see that continued trend. so you know we're starting to see that continued trend I think the number is 35% to 40% obligated and spent. i think the number is 35% to 40% obligated and spent

Speaker 1: Yeah. Yeah. yeah

Speaker 2: But the, the tail on that, on those dollars, continue on, so stay neutral. But the, the tail on that, on those dollars, continue on, so stay neutral. but the the tail on that on those dollars continue on so stay neutral

Speaker 1: Great. In the quarter, I thought there was a little bit more talk around international and some of the tick up that you've seen there. So maybe could you touch on that, expand on that? You know, what types of projects are you seeing? How broad-based across the regions and so on? Great. great In the quarter, I thought there was a little bit more talk around international and some of the tick up that you've seen there. in the quarter i thought there was a little bit more talk around international and some of the tick up that you've seen there So maybe could you touch on that, expand on that? so maybe could you touch on that expand on that You know, what types of projects are you seeing? you know what types of projects are you seeing How broad-based across the regions and so on? how broad-based across the regions and so on

Speaker 3: Yeah. Yeah, actually, you know, if you look at our results for Q1, we said that international grew faster than the domestic business, and that's driven by, you know, pretty broad performance across Australia and New Zealand. We've done really well in the Middle East, especially with some of the marquee projects that are being, you know, under development now, and we have a pretty strong position there, and we see some good pipeline there as well. And then the UK has been very strong. Yeah. yeah Yeah, actually, you know, if you look at our results for Q1, we said that international grew faster than the domestic business, and that's driven by, you know, pretty broad performance across Australia and New Zealand. yeah actually you know if you look at our results for q1 we said that international grew faster than the domestic business and that's driven by you know pretty broad performance across australia and new zealand We've done really well in the Middle East, especially with some of the marquee projects that are being, you know, under development now, and we have a pretty strong position there, and we see some good pipeline there as well. we've done really well in the middle east especially with some of the marquee projects that are being you know under development now and we have a pretty strong position there and we see some good pipeline there as well And then the UK has been very strong. and then the uk has been very strong So obviously, after a few years of political uncertainty, we've had some stability in the last, call it year, year and a half, and we're seeing that, you know, show up in our business strength, both in terms of what we do at Jacobs, but also the, the PA business has been pretty strong as well for us. So international is very strong, and we continue to see that pipeline grow quite nicely. So obviously, after a few years of political uncertainty, we've had some stability in the last, call it year, year and a half, and we're seeing that, you know, show up in our business strength, both in terms of what we do at Jacobs, but also the, the PA business has been pretty strong as well for us. so obviously after a few years of political uncertainty we've had some stability in the last call it year year and a half and we're seeing that you know show up in our business strength both in terms of what we do at jacobs but also the the pa business has been pretty strong as well for us So international is very strong, and we continue to see that pipeline grow quite nicely. so international is very strong and we continue to see that pipeline grow quite nicely

Speaker 2: The add I would put on that is, you hear a lot about Australia. The add I would put on that is, you hear a lot about Australia. the add i would put on that is you hear a lot about australia

Speaker 1: Yeah. Yeah. yeah

Speaker 2: And we've actually seen the opposite. You know, there were not a lot of huge, or was that huge, larger transportation jobs going on in the, the country. We were fortunate to win the largest, which is called, Torrens to Darlington. It's a job outside of, in Adelaide. And so that's really driven the business. But what was consistent and a continuation of what, what, Venk is saying is, is that our water business was solid across the world and drove the Australia growth as well. And we've actually seen the opposite. and we've actually seen the opposite You know, there were not a lot of huge, or was that huge, larger transportation jobs going on in the, the country. you know there were not a lot of huge or was that huge larger transportation jobs going on in the the country We were fortunate to win the largest, which is called, Torrens to Darlington. we were fortunate to win the largest which is called torrens to darlington It's a job outside of, in Adelaide. it's a job outside of in adelaide And so that's really driven the business. and so that's really driven the business But what was consistent and a continuation of what, what, Venk is saying is, is that our water business was solid across the world and drove the Australia growth as well. but what was consistent and a continuation of what what venk is saying is is that our water business was solid across the world and drove the australia growth as well

Speaker 1: Got it. Maybe just to think through on one of the questions there, we had, like, uses of cash- Got it. got it Maybe just to think through on one of the questions there, we had, like, uses of cash- maybe just to think through on one of the questions there we had like uses of cash-

Speaker 2: Yeah Yeah yeah

Speaker 1: Right? I had a broader question just around the industry and consolidation and so forth. So the sector's very fragmented. We talked a little bit about the current cross currents of the industry right now. I mean, how do you expect the industry to evolve? Do you see more combinations and so forth in the future, just given the environment or not? Right? right I had a broader question just around the industry and consolidation and so forth. i had a broader question just around the industry and consolidation and so forth So the sector's very fragmented. so the sector's very fragmented We talked a little bit about the current cross currents of the industry right now. we talked a little bit about the current cross currents of the industry right now I mean, how do you expect the industry to evolve? i mean how do you expect the industry to evolve Do you see more combinations and so forth in the future, just given the environment or not? do you see more combinations and so forth in the future just given the environment or not

Speaker 2: Yeah, maybe I, maybe I'll talk about the industry, and then, Venk, you can talk a little bit about kinda how we view on- Yeah, maybe I, maybe I'll talk about the industry, and then, Venk, you can talk a little bit about kinda how we view on- yeah maybe i maybe i'll talk about the industry and then venk you can talk a little bit about kinda how we view on-

Speaker 1: Sure Sure sure

Speaker 2: On Jacobs. On the industry, do I see, excuse me, sector-based consolidation happening? When I say sector- On Jacobs. on jacobs On the industry, do I see, excuse me, sector-based consolidation happening? on the industry do i see excuse me sector-based consolidation happening When I say sector- when i say sector-

Speaker 1: Yeah Yeah yeah

Speaker 2: -by end market? -by end market? -by end market

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Likely, right? There, there are a lot of opportunities there. As far as large-scale consolidation- Likely, right? likely right There, there are a lot of opportunities there. there there are a lot of opportunities there As far as large-scale consolidation- as far as large-scale consolidation-

Speaker 1: Yeah Yeah yeah

Speaker 2: ... I wouldn't speculate. ... I wouldn't speculate. i wouldn't speculate

Speaker 1: Sure Sure sure

Speaker 2: that that would be, that would be something that's a, a certainty, because we've got a lot of... I mean, you talk about our organic opportunities. that that would be, that would be something that's a, a certainty, because we've got a lot of... that that would be that would be something that's a a certainty because we've got a lot of I mean, you talk about our organic opportunities. i mean you talk about our organic opportunities

Speaker 3: Yeah, and as it relates to Jacobs, you know, for us, we're very confident in terms of the organic growth story. You know, we've seen the guidance raised in fiscal 2026, and obviously, pipeline is pretty strong, and our book-to-bill is pretty strong. So our, you know, in terms of capital allocation, our first priority is continue to invest in the organic growth. And then, you know, as it was indicated in the polling, we've been very, very aggressive buyers of our stock. We think it's a tremendous value, and we've been returning well over 100% of our free cash flow last year, and committed to returning at least 65% this year. We're already on track to exceed that. Yeah, and as it relates to Jacobs, you know, for us, we're very confident in terms of the organic growth story. yeah and as it relates to jacobs you know for us we're very confident in terms of the organic growth story You know, we've seen the guidance raised in fiscal 2026, and obviously, pipeline is pretty strong, and our book-to-bill is pretty strong. you know we've seen the guidance raised in fiscal 2026 and obviously pipeline is pretty strong and our book-to-bill is pretty strong So our, you know, in terms of capital allocation, our first priority is continue to invest in the organic growth. so our you know in terms of capital allocation our first priority is continue to invest in the organic growth And then, you know, as it was indicated in the polling, we've been very, very aggressive buyers of our stock. and then you know as it was indicated in the polling we've been very very aggressive buyers of our stock We think it's a tremendous value, and we've been returning well over 100% of our free cash flow last year, and committed to returning at least 65% this year. we think it's a tremendous value and we've been returning well over 100% of our free cash flow last year and committed to returning at least 65% this year We're already on track to exceed that. we're already on track to exceed that And then ultimately, you know, we will look at M&A, but it's probably not something in the short to medium term. You know, PA is the near-term focus, but we feel really good about our long-term organic growth, and that's gonna be the primary use of cash in addition to the share repurchases. And also on the dividend front, you know, we've grown our dividend by, you know, 10%+ over the last five years, and we just raised our dividend recently to a 12.5% year-on-year increase, so very, very committed to capital returns as well. And then ultimately, you know, we will look at M&A, but it's probably not something in the short to medium term. and then ultimately you know we will look at m&a but it's probably not something in the short to medium term You know, PA is the near-term focus, but we feel really good about our long-term organic growth, and that's gonna be the primary use of cash in addition to the share repurchases. you know pa is the near-term focus but we feel really good about our long-term organic growth and that's gonna be the primary use of cash in addition to the share repurchases And also on the dividend front, you know, we've grown our dividend by, you know, 10% + over the last five years, and we just raised our dividend recently to a 12.5% year-on-year increase, so very, very committed to capital returns as well. and also on the dividend front you know we've grown our dividend by you know 10% + over the last five years and we just raised our dividend recently to a 12.5% year-on-year increase so very very committed to capital returns as well

Speaker 1: Great. Great. great

Speaker 2: You know, Adam, a real... I think a good example, there's a lot happening in the energy and power space right now. You know, Adam, a real... you know adam a real I think a good example, there's a lot happening in the energy and power space right now. i think a good example there's a lot happening in the energy and power space right now

Speaker 1: Mm-hmm. Mm-hmm. mm-hmm

Speaker 2: And some very deals that have some very high multiples that are related with them. Just kinda how we've been growing organically in that same space, in the energy and power space, is that the U.S. business right now is growing at clear double digits in energy and power organically, and we have been scaling with pretty significant levels of hiring that's going on in the Philippines and in India. And some very deals that have some very high multiples that are related with them. and some very deals that have some very high multiples that are related with them Just kinda how we've been growing organically in that same space, in the energy and power space, is that the U.S. business right now is growing at clear double digits in energy and power organically, and we have been scaling with pretty significant levels of hiring that's going on in the Philippines and in India. just kinda how we've been growing organically in that same space in the energy and power space is that the u.s business right now is growing at clear double digits in energy and power organically and we have been scaling with pretty significant levels of hiring that's going on in the philippines and in india

Speaker 1: Mm. Mm. mm

Speaker 2: Right? So this isn't outsourced engineering or, you know, you take the job to a certain point, and you put production engineering in a different location. This is scaling on an organic basis where the talent is and combining them with global talent in front of the client and creating, you know, a business. That business, three years ago in the US, barely, barely a business, right? So those are things where we've got great opportunities organically. Right? right So this isn't outsourced engineering or, you know, you take the job to a certain point, and you put production engineering in a different location. so this isn't outsourced engineering or you know you take the job to a certain point and you put production engineering in a different location This is scaling on an organic basis where the talent is and combining them with global talent in front of the client and creating, you know, a business. this is scaling on an organic basis where the talent is and combining them with global talent in front of the client and creating you know a business That business, three years ago in the US, barely, barely a business, right? that business three years ago in the us barely barely a business right So those are things where we've got great opportunities organically. so those are things where we've got great opportunities organically

Speaker 1: I appreciate you adding that color there. So maybe to button this all up, we start with the long term. We'll end with the long term a little bit. When you think about getting to that 16%+, you know, adjusted EBITDA margins by the end of the decade, I mean, what are the two or three most important, you know, structural drivers that you think will get there? I appreciate you adding that color there. i appreciate you adding that color there So maybe to button this all up, we start with the long term. so maybe to button this all up we start with the long term We'll end with the long term a little bit. we'll end with the long term a little bit When you think about getting to that 16%+, you know, adjusted EBITDA margins by the end of the decade, I mean, what are the two or three most important, you know, structural drivers that you think will get there? when you think about getting to that 16%+ you know adjusted ebitda margins by the end of the decade i mean what are the two or three most important you know structural drivers that you think will get there

Speaker 3: Yeah, so several things. So we said we'll get to 16%+ by fiscal 2029. We're well on our way to get there. I mean, obviously, this year, last year, we did 110 basis point increase in EBITDA margin, which is probably one of the highest in the industry, if not the highest. This year and in subsequent years, we've talked about 50 to 80 basis points. So the primary drivers of that would be, number one, operating leverage. We're making a commitment to grow the OpEx at a substantially slower pace than the revenue growth, so that's gonna continue to drive margin expansion. Yeah, so several things. yeah so several things So we said we'll get to 16%+ by fiscal 2029. so we said we'll get to 16%+ by fiscal 2029 We're well on our way to get there. we're well on our way to get there I mean, obviously, this year, last year, we did 110 basis point increase in EBITDA margin, which is probably one of the highest in the industry, if not the highest. i mean obviously this year last year we did 110 basis point increase in ebitda margin which is probably one of the highest in the industry if not the highest This year and in subsequent years, we've talked about 50 to 80 basis points. this year and in subsequent years we've talked about 50 to 80 basis points So the primary drivers of that would be, number one, operating leverage. so the primary drivers of that would be number one operating leverage We're making a commitment to grow the OpEx at a substantially slower pace than the revenue growth, so that's gonna continue to drive margin expansion. we're making a commitment to grow the opex at a substantially slower pace than the revenue growth so that's gonna continue to drive margin expansion And then, we've called out as specific drivers in terms of gross margin expansion, in terms of, you know, how we do more global delivery, especially as it relates to some of these life sciences and advanced manufacturing and water-related projects. That'll be a good boost to our margins. And then, in addition to that, the commercial mix of our business is also growing. So multiple aspects to our margin expansion story, and we feel really good about reaching those targets by fiscal 2029, if not sooner. And then, we've called out as specific drivers in terms of gross margin expansion, in terms of, you know, how we do more global delivery, especially as it relates to some of these life sciences and advanced manufacturing and water-related projects. and then we've called out as specific drivers in terms of gross margin expansion in terms of you know how we do more global delivery especially as it relates to some of these life sciences and advanced manufacturing and water-related projects That'll be a good boost to our margins. that'll be a good boost to our margins And then, in addition to that, the commercial mix of our business is also growing. and then in addition to that the commercial mix of our business is also growing So multiple aspects to our margin expansion story, and we feel really good about reaching those targets by fiscal 2029, if not sooner. so multiple aspects to our margin expansion story and we feel really good about reaching those targets by fiscal 2029 if not sooner

Speaker 1: Great. Thank you, Venk, and thank you, Bob. Great. great Thank you, Venk, and thank you, Bob. thank you venk and thank you bob

Speaker 3: Sure. Sure. sure

Speaker 1: Let's give them a round of applause, and thanks so much for being here. Let's give them a round of applause, and thanks so much for being here. let's give them a round of applause and thanks so much for being here

Speaker 2: Yeah, thanks. Yeah, thanks. yeah thanks

Speaker 3: Thank you. Thank you. thank you

Speaker 1: All right. Thank you. All right. all right Thank you. thank you