Q1 2022 Jacobs Engineering Group Inc Earnings Call
Speaker 1: You
Yes.
Okay.
Speaker 2: Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Jacobs Fiscal First Quarter 2022 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.
Good morning, My name is Rob and I will be your conference operator today.
At this time I would like to welcome everyone to the Jacobs fiscal first quarter 2022 earnings conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Speaker 2: If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star one. Thank you. Jonathan Doros, you may begin your conference.
If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press Star one.
Jonathan you May begin your conference.
Speaker 2: Thank you. Good morning to all. Our earnings announcement and 10Q were filed this morning, and we have posted a copy of this slide presentation on our website, which we will reference during the call. I would like to refer you to slide two of the presentation materials for information regarding forward-looking statements, non-GAAP financial measure, and pro forma. Take care.
Thank you good morning to all our earnings announcement and 10-Q were filed this morning, we have posted a copy of the slide presentation on our website.
Referenced during the call I would like to refer you to slide two of the presentation materials for information regarding forward looking statements non-GAAP financial measure and pro forma figures.
Speaker 2: For pro forma comparisons, current and prior periods include the results of recent acquisitions, including Black Links, as well as our strategic investment in P.A. consulting for the full theory.
For pro forma comparisons current and prior periods to include the results of recent acquisitions, including <unk> as.
As well as our strategic investment in <unk> consulting for the full period.
Turning to the agenda on slide three.
Speaker 2: Fortune to the agenda. I'd like to share that on Friday March 4 we'll be releasing a digital deep dive of our new Jacob strategy. We also plan to attend the Raymond James Investor Conference on March 7 in Orlando and the B of a Global Industrials Conference on March 15 in London. Now for the agenda.
Fortunately the agenda I would like to share that on Friday March four we'll be releasing a digital deep dive of our new Jacobs strategy.
We also plan to attend the Raymond James Investor Conference on March seven in Orlando, and the Bofa Global Industrials Conference on March 15th and London.
Now to the agenda.
Speaking on today's call will be our chair and CEO , Steve Dmitry, <unk>, President and Chief operating Officer, Bob Borgata, and President and Chief Financial Officer, Kevin Berryman, Steve will begin by updating the progress we're making against our strategy and then discuss our data solutions strategy, including the acquisition of Streetlight data.
Speaker 2: Taking out today's call will be our Chair and CEO , Steve Demetriou, President and Chief Operating Officer, Bob Bergata, and President and Chief Financial Officer, Tevin Berryman. Steve will begin by updating the progress we're making against our strategy, and then discuss our data solution strategy, including the acquisition of streetlight data.
Speaker 2: Bob will then review our performance by line of business, and Kevin will provide a more in-depth discussion of our financial metrics, followed by a review of PA Consulting's financial profile, as well as a review of our balance sheet.
Bob will then review our performance by line of business and Kevin will provide a more in depth discussion of our financial metrics, followed by a review of <unk> consulting financial profile as well as a review of our balance sheet and cash flow.
Speaker 2: Finally, Steve will provide detail on our update outlook, along with some closing remarks, and then we'll open the call for your questions.
Finally, Steve will provide detail on our updated outlook along with some closing remarks, and then we'll open the call for your questions.
Speaker 2: In the appendix to the presentation, we have provided additional ESG-related information, including examples of our leading ESG solution. But that, I'll now pass it over to Steve D'Ami-Trio, of Chair and CEO .
In the appendix of the presentation, we have provided additional ESG related information, including examples of our leading ESG, so with that I'll now pass it over to Steve Demetrios Kerr CEO .
Thank you for joining us today to discuss our first quarter fiscal year 2020 to business performance and our key strategic initiatives.
Speaker 2: Thank you for joining us today to discuss our first quarter fiscal year 2022 business performance and our key strategic initiatives.
As we've stated before we're on the front end of a multiyear growth cycle for the company.
Speaker 2: As we stated before, we're on the front end of a multi-year growth cycle for the company. This is driven by a combination of secular growth opportunities in our course sectors, such as UN, US infrastructure, and best.
This was driven by a combination of secular growth opportunities in our core sectors, such as the <unk> infrastructure investments.
Speaker 2: climate response, a super cycle of supply chain investments in electronics, as well as being at the mixes of disruptive new technologies and domains of space, cyber and software analytics.
Climate response, a super cycle of supply chain investments in electronics.
Well as being at the mixes of disruptive new technologies and domains of space cyber and software analytics.
Speaker 2: We expect these opportunities to drive accelerated revenue growth for the balance of the year.
We expect these opportunities to drive accelerated revenue growth for the balance of the year.
Speaker 2: Looking into 2025 to beyond, Lee Envision Jacobs is a company like No other. A company that combines these domain knowledge of operational environments with the latest advances in technology. We are excited to share a more comprehensive analysis of our strategy at a Marxist Vester event.
Looking into 2025 and beyond we envision Jacobs is a company like no. Other company that combines deep domain knowledge of operational environments with the latest advances in technology.
We are excited to share a more comprehensive analysis of our strategy at our March investor event.
Speaker 2: Now let's discuss the first quarter results. During the quarter, and people in place of solutions, our advanced facilities business delivered double-digit revenue growth in over 20% growth and operating profit, driven by our work with Intel and other global microchip customers.
Now, let's discuss the first quarter results during.
During the quarter of people <unk> places solutions, our advanced facilities business delivered double digit revenue growth and over 20% growth in operating profit driven by our work with Intel and other global Microchip customers.
Speaker 2: along with growth in life sciences and the electrical vehicle market.
Along with growth in life Sciences in the electrical vehicle market.
Speaker 2: And then the Americans were also seeing the beginnings of projects related to the US infrastructure bill enter our pipeline.
And then the Americas, we're also seeing the beginnings of projects related to the U S infrastructure Bill enter our pipeline.
Within critical mission solutions, we have a highly anticipated significant backlog addition from our space based intelligence surveillance reconnaissance group call. It rapid solutions.
Speaker 2: Within critical mission solutions, we had a highly anticipated significant backlog addition from our space-based intelligence surveillance reconnaissance group called Rapid Solutions.
Speaker 2: The remainder of CMS pipeline remains strong with substantial new award opportunities expected this fiscal year.
The remainder of CMS pipeline remains strong with substantial New award opportunities expected this fiscal year.
Speaker 2: VA Confelping continued to outperform, hosting another triple double with 21% revenue growth, adjusted operating profit margins of 22% and double digit pro forma year over year backlog growth.
VA consulting continued to outperform posting another triple double with 21% revenue growth adjusted operating profit margins of 22% and double digit pro forma year over year backlog growth.
Jacobs net revenue increased 6% year over year, and adjusted EBITDA grew 11% during the quarter.
Speaker 2: Total Jacobs net revenue increased 6% year over year and adjusted EBITDA through 11% during the quarter.
Speaker 2: In the first quarter, we experienced strong bookings. As a result, our overall backlog ended the quarter up 12% year over year and up 10% on a pro-form of base.
In the first quarter, we experienced strong bookings as a result, our overall backlog ended the quarter up 12% year over year and up 10% on a pro forma basis given.
Speaker 2: He had been the strong backlog growth dynamics of our business, where reiterating our fiscal 2022 adjusted EBITDA and adjusted ETS outlook.
Given the strong backlog growth dynamics of our business, we're reiterating our fiscal 2022, adjusted EBITDA and adjusted EPS outlook.
Speaker 2: Looking beyond 2022, we expect strong organic growth to result in approximately $10 per share of adjusted DPS in fiscal year 2025, excluding any potential deployment of material capital toward M&A opportunities.
Looking beyond 2022, we expect strong organic growth to result in approximately $10 per share of adjusted EPS in fiscal year 2025, excluding any potential deployment of material capital towards M&A opportunities.
Speaker 2: At our investor event in early March, we'll provide additional detail on how capital deployment and focus new growth opportunities can provide additional upside to this expectation.
At our Investor event in early March we will provide additional detail on our capital deployment and focused new growth opportunities can provide additional upside to this expectation.
Turning to slide five one of the most attractive opportunities for Jacobs to expand our data and cyber businesses across three focus areas of specialized consulting operational technology solutions and data analytics platforms.
Speaker 2: Turning to slide five, one of the most attractive opportunities for Jacobs is to expand our data and cyber businesses to cross three focus areas of specialized consulting, operational technology solutions, and data analytics platform.
Speaker 2: With a combination of strategic acquisition and key talent additions, we have built a strong business providing data and fiber solutions at scale to protect national security.
With a combination of strategic acquisition and key talent additions, we have built a strong business, providing data and cyber solutions at scale to protect national security.
Speaker 2: Expanding beyond national security as attempts by bad actors to cripple both public and commercial assets and facilities continues to increase. We see accelerating requests for our data and cyber solutions from our critical infrastructure costs.
Expanding beyond National security as attempts by bad actors to cripple, both public and commercial assets and facilities continues to increase we see accelerating request for our data and cyber solutions from our critical infrastructure customers.
We have developed and acquired a portfolio of high technology solutions, such as synthetic aperture radar technology and the black links edge computing platform, which we plan to further scale and commercialize.
Speaker 2: We have developed and acquired a portfolio of high technology solutions such as synthetic aperture radar technology and the black links edge computing platform which we plan to further scale and commercialize.
Speaker 2: Jacob's also has numerous software-based analytics solutions across the water, transportation, and environmental verticals, which is now enhanced with the acquisition of street light data, which I'd now like to discuss in further detail.
Jacobs also has numerous software based analytic solutions across the water transportation and environmental verticals, which is now enhanced with the acquisition of Streetlight data, which I'd now like to discuss in further detail.
Moving to slide six street like data as a vertical data as a service analytics platform that helps customers gain insights into three high growth areas.
Speaker 3: Street-like data is a vertical data as a service analytics platform that helps customers gain insights into three high growth areas.
Speaker 3: First is understanding mobility and last mile supply chain analytics of all modes of vehicle and pedestrian movement, as well as trip patterns both in recent and comprehensive historical data.
First is understanding mobility and last mile supply chain analytics, all modes of vehicle and pedestrian movement as well as trip patterns. Both in recent in comprehensive historical data.
Speaker 3: Second, is analyzing the impact of infrastructure investments, including how to plan the extension of future communities, and where and when to deploy electrical vehicle charging solutions and autonomous vehicles to enhance sustainable solutions.
Second is analyzing the impact of infrastructure investments, including how to plan the expansion of future communities, and where and when to deploy electrical vehicle charging solutions and autonomous vehicles to enhance sustainable solutions.
Speaker 3: And third is measuring the social value impact of infrastructure investments on underserved communities and populations overall.
And third is measuring the social value impact of infrastructure investments on underserved communities in populations overall.
As the U S prepares to embark on one of the largest infrastructure investments in history, having access to these analytics will be crucial which is a new multibillion dollar market for Jacobs.
Speaker 3: As the U.S. prepares to embark on one of the largest infrastructure investments in history, having access to these analytics will be crucial, which is a new multi-billion dollar market for Jacob.
We view the addressable market for Streetlights in three buckets.
Speaker 3: We've viewed the addressable market for street life in three buckets.
Expanding market share with North American transportation focused customer base.
Speaker 3: Expanding market share with North American transportation focus customer base.
Speaker 3: leveraging into other infrastructure segments such as water, environmental, and the built environment.
Leveraging into other infrastructure segments, such as water environmental and the built environment.
Speaker 3: Exploiting adjacent opportunities by expanding internationally.
Exploiting adjacent opportunities by expanding internationally.
Speaker 3: and developing large disruptive use cases across multiple areas, leveraging Jacob's portfolio of data and technology solutions, including geospatial technology of edge computing capabilities from recently acquired black links to create expanded market penetration growth opportunities and solutions for our clients.
In developing large disruptive use cases across multiple areas leveraging jacobs portfolio of data and technology solutions, including Geospatial technology edge computing capabilities from recently acquired Black lakes to create expanded market penetration growth opportunities and solutions for our clients.
Speaker 3: The team at Streetlight has built the industry's leading solution, which is deployed throughout several U.S. and Canadian transportation authorities' immunism palette.
The team at Streetlight has built the industry's leading solution, which is deployed throughout several U S and Canadian transportation authorities municipalities.
Specifically streetlight as multiple software development cycles ahead of the competition driven by its unique multimodal data analytics boat proprietary algorithms and front end user experience technology.
Speaker 3: Specifically, street life is multiple software development cycles ahead of the competition driven by its unique multimodal data analytics mode for proprietary algorithms and front end user experience technology.
We expect revenue to grow at over a 30% CAGR through 2025.
Speaker 3: We expect revenue to grow at over a 30% cagarette through 2025.
A key part of our strategy is investing aligning and integrating our data and digital capabilities to truly advance our scale and gain the financial economics of our high margin recurring revenue opportunity that further supports high value client solutions. This streetlight acquisition is an important step in this direction.
Speaker 3: A key part of our strategy is investing, aligning and integrating our data and digital capabilities to truly advance our scale and gain the financial economics of a high margin recurring revenue opportunity that further supports high value client solutions. This streetlight acquisition is an importance.
Speaker 2: With that, I'll turn the call over to Bob Pregada to provide more detail by line of business. Thank you, Steve. Moving on to slide seven to review critical mission solutions. During the first quarter, our CMS business continued its strong performance with total backlogs, reaching 11% on a performance basis, to $10.8 billion. Driven by strategic new wins in space, cyber and intelligence.
With that I'll turn the call over to Bob Borgata to provide more detail by line of business.
Moving on to slide seven to review critical mission solutions during the first quarter. Our CMS business continued its strong performance with total backlog, increasing 11% on a pro forma basis to $10 8 billion.
Driven by strategic new wins in space Cyber and intelligence.
Speaker 2: Our CMS strategy is focused on creating resilient revenue growth in margin expansion by offering technology-enabled solutions aligned to critical national priorities.
Our <unk> strategy is focused on creating resilient revenue growth and margin expansion by offering technology enabled solutions aligned to critical national priorities.
Three market trends that we see offering continued strong growth. This year include spaceborne, ISR edge analytics and intelligent asset management.
Speaker 2: Three market trends that we see offering continued strong growth this year include State-born ISR, Edge Analytics, and the Telugu-NASA-Admanis-
Speaker 2: Beginning with space ISR, our military leaders contend that future conflicts will be won by those with an information advantage, enabling the ability to outpace, outthink, and outmaneuver are near-peer adversaries across multiple domains. Land, sea, air, fiber, and increasingly space.
Beginning with space ISR.
Military leaders contend that future conflicts will be won by those with an information advantage, enabling the ability to outpace our zinc and outmaneuver, our near peer adversaries across multiple domains land sea air cyber and increasingly space.
Speaker 2: Low orbiting surveillance satellites can collect data much more quickly than airborne ISR, covering 35 fold the number of miles per hour. These small fats with radio frequencies and bedded aperture radar provide time critical intelligence in support of commercial and military mission.
Low orbiting surveillance satellites can collect data much more quickly than airborne ISR covering 35 fold the number of miles per hour.
These small sets with radiofrequency synthetic aperture radar provide time critical intelligence and supportive commercial and military missions Jacobs.
Speaker 2: Jacob continues to develop his advanced payload production and integration capability, building on technologies from PW.
<unk> continues to develop its advanced payload production and integration capability building on technologies from Tw.
With our recent successes along with the integration of Blackening innovative software platforms, we have unlocked the opportunity to create a potential $1 billion annual recurring space ISR business longer term.
Speaker 2: With our recent successes, along with the integration of blackening innovative software platforms, we have unlocked the opportunity to create a potential half billion dollar annual recurring space ISR business long term.
Speaker 2: Also during the quarter, Jacob's won a 36 month contract to provide state of the art digital aerial imagery data that will be used to enhance precision agricultural practices in the Midwestern United States.
Also during the quarter Jacobs, one a 36 month contract to provide state of the art digital aerial imagery data that will be used to enhance precision agricultural practice practices in the Midwestern United States.
The services will be provided using tw technology called <unk>, which is a scalable highly agile airborne imagery system.
Speaker 2: The services will be provided using TW Technology called Chio5, which is a scalable, highly agile, airborne images.
Moving on to edge analytics.
Speaker 2: Moving on to edge analytics. That is often utilized in challenging and unlikely places, like the International Space Station, a military satellite, ships at sea, factory floors, water purification plants, traffic lights and neighborhood pharmacies.
That is often utilized in challenging in unlikely places like the international space station and military satellite shifted C factory floors water purification plant traffic lights and neighborhood pharmacy.
<unk> traditionally reside in a data center cloud.
Speaker 2: Data might traditionally reside in a data center or cloud.
Speaker 2: But many important decisions need to happen on the edge. Jacob's recent acquisition of black links and edge analytics leader in providing the sensors, software, and analytic services allows leaders to speed their decision making, exponential.
With many important decisions need to happen on the edge Jacobs recent acquisition of Black wings and edge analytics leader in providing the sensors software and analytic services allows leader leaders to speed decision, making exponentially.
Speaker 2: As edge computing proliferates across all domains, rapidly gaining actionable insights from the vast data become substantial.
Ed computing proliferates across all domains rapidly gaining actionable insights from the back data becomes essential.
Speaker 2: We are already leveraging Black Link's edge computing capability not only across CMS, but also the infrastructure sectors of PNPS in 2022.
We are already leveraging <unk> edge computing capability, not only across CMS, but also the infrastructure sectors. The PPS in 2022.
Now in the area of intelligent asset management, we're continuing to build on the solutions, we developed with naphtha centers and have now deployed at multiple U S Navy installation.
Speaker 2: Now in the area of intelligent asset management, we're continuing to build on the solutions we developed with NASA's centers and have now deployed at multiple US Navy installations.
Speaker 2: Typically these programs range from $250 to $300 million over 68 years. We see a growing pipeline of opportunities that span across DOD, the intelligence community, and commercial clients.
Typically these programs range from $250 million to $300 million over six to eight years, we see a growing pipeline of opportunities that span across the intelligence community and commercial clients.
The value for our clients is increased uptime and availability of the facilities at lower total lifecycle cost achieved through targeted use of predictive analytics, while simultaneously upscaling the workforce that these mission critical complex installations.
Speaker 2: The value for a client is increased uptime and availability of the facilities at lower total life cycle costs, achieved through targeted use of predictive analytics. While simultaneously upscaling the workforce that these mission critical, complex installations.
In summary, we see solid demand for our solutions in 2022, despite the headwinds of the continuing resolution, which will likely get extended through March.
Speaker 2: In summary, we see solid demand for our solutions in 2022, despite the headwinds of the continuing revolution, which will likely get extended through March, although we are seeing some funding pushouts impacting our cyber intelligence and defense plans, there are pockets of new funding across our diverse US government customer base, as well as in commercial sectors like Telecom, where 5G continues to advance.
Although we are seeing some funding push outs impacting our cyber intelligence and defense clients. There are pockets of new funding across our diverse U S government customer base as well as in commercial sectors like telecom, where <unk> continued to advance.
Speaker 2: CLCMS PIECE Sales Pipeline remains robust with the next 18 month qualified new business pipeline remaining at $30 billion, including $10 billion in source selection with an expanding margin profile.
CMS pipe sales pipeline remains robust with the next 18 months qualified new business pipeline remaining at $30 billion.
Including $10 billion in source selection with an expanding margin profile.
Now on slide eight I will discuss our people in place the solutions business.
Speaker 2: Now on slide 8, I'll discuss our people in place to solution business. We started the fiscal year with strong financial performance, resulting in 10% year-over-year backlog growth.
We started the fiscal year with strong financial performance, resulting in 10% year over year backlog growth.
I will discuss our results across four areas, including climate response supply chain diversification infrastructure data solutions and infrastructure modernization.
Speaker 2: I will discuss our results across four areas, including climate response, supply chain diversification, infrastructure data solutions, and infrastructure modernization.
Starting with climate response.
Speaker 2: Opportunities continue to increase related energy transition. And this is resulted in growth across our end markets and client sectors. Notably for grid resiliency, green hydrogen and renewable energy generation.
Opportunities continue to increase related to energy transition and this is this has resulted in growth across our end markets and client sectors, notably for grid resiliency green hydrogen and renewable energy generation.
Most recently Jacobs was selected as the program management partner to Pacific gas and electric on their multi year electric underground program.
Speaker 2: Most recently, Jacob's was selected as the program management partner to pick the gas from electric on their multi-year electric underground program.
Speaker 2: The largest of its kind in the U.S., the ambitious program will bring 10,000 miles of power lines under grabs to mitigate wildfires in and near high-fire spread areas to respond to California's evolving climate challenge.
The largest of its kind in the U S. The ambitious program will bring 10000 miles of power lines underground to mitigate wildfires in and near high fire threat areas to respond to California's evolving climate challenges.
Jacobs Bryan a global interdisciplinary team as well as advanced technology approaches that draw on more than 30 years of experience with <unk> and other large complex underground programs like <unk> in Germany.
Speaker 2: FAKETS will provide a global interdisciplinary team, as well as advanced technology approaches that draw on more than 30 years of experience with PG&E and other large complex underground programs like Soudland in Germany.
This important win also leveraged our subject matter experts in Ta for yet another synergistic win together.
Speaker 2: This important win also leveraged our subject matter experts in TA for yet another synergistic win together.
Speaker 2: With our recent award at the Tembro Power Station in the UK, we're building on our portfolio of industry leadership in the area of hydrogen-based power. And we've been successful with multiple awards related to solar and wind renewable generation projects in Wyoming and Australia.
With a recent award at the timber power station in the UK. We are building on our portfolio of industry leadership in the area of hydrogen based power.
And we've been successful with multiple awards related to solar and wind renewable generation project in Wyoming and Australia.
Moving to supply chain diversification.
As a result of the global supply chain challenge.
Speaker 2: As a result of the global supply chain challenge, all sectors in our advanced facilities business are in growth mode. With semiconductors, life sciences, and electric vehicles leading the field. And across these sectors, our abilities to leverage our global integrated delivery platform and data-centric execution on these complex facilities is a clear market differentiator.
All sectors and our advanced facilities business are in growth mode with semiconductors life Sciences, and electric vehicles, leading the field in.
And across the sectors, our ability to leverage our global integrated delivery platform and data centric execution on these complex facilities is a clear market differentiator.
Our solutions include significant wind within Asia chip manufacturer expanding capacity in North America continued.
Speaker 2: Our solutions include significant wins with an Asia shipment factor, expanding capacity in North America, continued support of Intel with additional facilities including new bills in the US, and Jacobs was awarded the delivery of the first data center building for a major collocation client in the South Western United States.
Continued support of Intel with additional facility, including new builds in the U S and.
And Jacobs was awarded the delivery of the first data center building for a major colocation clients in the southwestern United States.
And health and life Sciences, We recently won a project with spark Therapeutics, a Roche Pharmaceuticals company to build a gene therapy innovation center in downtown Philadelphia to research develop and manufacture data Dr products.
Speaker 2: In health and life sciences, we recently won a project with Spark Therapeutics, a roast pharmaceuticals company to build a gene therapy innovation center in downtown Philadelphia to research, develop, and manufacture data-the-art products.
Speaker 2: Jacob continues to deliver sustainable facilities across large sciences, like Fujifilm, DioCent, biotechnology, new large scale self-close facility in North Carolina.
Jacobs continues to deliver sustainable facilities across life Sciences, like Fujifilm <unk> Biotechnologies, new large scale stockholder facility in North Carolina.
The largest of its kind in North America with the goal of 100% clean energy utilization and cutting edge waste disposal and recycling systems.
Speaker 2: The largest of its kind in North America with the goal of 100% clean energy utilization and cutting edge waste disposal and recycling systems.
Speaker 2: This is a great example of projects that enable us to build on our purpose of creating a more connected, sustainable world.
This is a great example of projects that enable us to deliver on our purpose of creating a more connected sustainable world.
Speaker 2: Critical healthcare for thriving communities is central to our purpose, and our teams are working with clients to advance outcomes, including design of a mental health facility serving communities in Western Sydney.
Critical health care for thriving communities is central to our purpose and our teams are working with clients to advanced outcome, including design of a mental health facility serving communities in Western Sydney.
Speaker 2: recent completion of a state of the Art Service Center in Central Florida, and a major hospital red redid element in Southeast Asia.
Recent completion of a state of the art surgical center in Central Florida.
And a major hospital redevelopment in southeast Asia.
Moving to infrastructure data solutions.
Speaker 2: Combining our recent digital acquisition to black links and screen light, as well as our venture investment in microgithub.
Binding our recent digital acquisitions of Black Lincoln Street light as well as our venture investment in micro <unk> labs.
Speaker 2: We are well positioned to provide our clients with technology-enabled solutions through enhanced analytics and insights. We are also ideally positioned to deliver unparalleled value to the transportation and electric vehicle ecosystem, including an innovative in-road charging system in the Midwest United States with electric arms.
We are well positioned to provide our clients with technology enabled solutions through enhanced analytics and insight.
We are also ideally positioned to deliver unparalleled value to the transportation and electric vehicle ecosystem, including an innovative inroad charging system in the Midwest in the United States with electronics.
In the U K, we are expanding our support of climate risk mitigation and multi community resiliency for the environment agency through continued innovation of our proven proprietary digital technology sled market.
Speaker 2: In the UK, we are expanding our support of climate risk mitigation and multi-community resiliency for the environment agency for continued innovation of our proven proprietary digital technology floodmob.
Speaker 2: Additionally, as part of the first water breakthrough challenge, we provided technical support to Angleon Water and United Geoity, which resulted in innovation awards in the area of artificial intelligence, persistent operation, and climate resilience solutions.
Additionally, as part of the first water breakthrough challenge, we provided technical support to Anglian water and United Utilities, which resulted in innovation award in the area of artificial intelligence for system operation.
And climate resilient solutions.
Touching on infrastructure modernization.
Speaker 2: Texting on infrastructure monetization. NIA in the Kingdom of Saudi Arabia is a unique greenfield opportunity where Jacobs is delivering strategic planning and consultancy services to build toward a net zero future.
In the Kingdom of Saudi Arabia is a unique greenfield opportunity, where Jacobs is delivering strategic planning and consultancy services to build towards a net zero future in.
Speaker 2: In the U.S., we are supporting clients on major programs and projects to align with capital funding and investment plans. We were selected for these awards based on our industry leading implementation and long-term delivery success.
In the U S. We are supporting clients on major programs and projects to align with capital funding and investment plan.
We were selected for these awards based on our industry, leading implementation and long term delivery success.
Specifically Jacobs was awarded the next phase of a major water treatment facility in North Texas.
Speaker 2: Specifically, Jacobs' award at the next phase of a major water treatment facility in North Texas, the new Toleray Ship Channel Bridge in Houston.
The new totally ship channel bridge in Houston.
Speaker 2: Denver International Airport, airport seventh runway expansion, and a critical win with our long time customers in New York, Metropolitan Transportation Authority.
Denver International Airport Airport seventh runway expansion.
And a critical win with our long term long time customers in New York Metropolitan Transportation Authority.
Speaker 2: Infemory are global capability and innovative solutions that continue to differentiate Jacobs and provide confidence in the strength.
In summary, our global capability and innovation innovative solutions have continued to differentiate Jacobs and provide confidence in the strength.
Speaker 2: of our business based on early transitioning with our clients and the longer term, global infrastructure stimulus. Turning to slide nine, let's review.
Of our business based on early positioning with our clients and longer term global infrastructure stimulus.
Turning to slide nine let's review our consulting group.
As Steve mentioned Ta continues to significantly outperform their unique combination of outcome driven strategic and digital consulting means that they are able to capitalize on the world's current megatrends of agile working climate change.
Speaker 2: As Steve mentioned, PA continues to significantly outperform. Their unique combination of outcome-driven, strategic, and digital consultant means that they are able to capitalize on the world's current mega-trans of agile working, climate change, human health and safety, and digital transformation.
Human health and safety in digital transformation.
Speaker 2: As an example, their clients focus on hybrid working is creating new opportunities for PA in organizational agility and resilience offense in a range of sectors including financial services and lifestyles.
As an example.
Their clients focus on hybrid working is creating new opportunities for ta and organizational agility and resilience offering and a range of sectors, including financial services and life Sciences.
Speaker 2: Digital consulting remains PA's broadest technical capability supported by increases in the last year in data science, analytics and AI.
Digital consulting remains <unk> broadest technical capability supported by increases in the last year and data science analytics and AI.
Speaker 2: Aligned with this, PA continues to add to its technology portfolio with offerings such as ODOOR. A daily diode which provides a new level of security for highly sensitive data, even for the most sophisticated segmented networks.
Aligned with this PAA continues to add to its technology portfolio with offerings, such as oak door.
A daily diode, which provides a new level of security for highly sensitive data even for the most sophisticated segmented networks.
I predict a groundbreaking AI system for predicting failures.
Speaker 2: I predict a groundbreaking AI system for predicting failures in critical electricity distribution, which has led to exciting new projects and opportunities with public utility providers in the United States.
And critical electricity distribution, which has led to exciting new projects and opportunities with public utility providers in the United States.
Speaker 2: And in the health market, P.A. has partnered with U.S.B. medical device startup FairPak Medical to create this patio pump grain system. A digital handheld single-patient use device to improve patient care and comfort.
And in the health market.
<unk> partnered with USD medical device startup Farepak medical to create this patio pump drainage system.
A digital handheld single patient use device to improve patient care and comfort.
P maintains its strong relationship with the UK government and has secured two new contracts for smart metering.
Speaker 2: FI is maintained that strong relationship with the UK government and has secured two new contracts for smart-beatering and electronic monitoring service.
Electronic monitoring services.
In the private sector successfully completed two projects with U S based commercial partners.
Speaker 2: In the project sector, PA successfully completed two projects with US-based commercial partners.
Speaker 2: The first with Rhea LLC is to develop a new air distribution platform to overcome material shortages and system installation challenges faced in the home voting industry.
The first with rare LLC is to develop a new air distribution platform to overcome material shortages and system installation challenges faced in the homebuilding industry.
And the second with keep origin, a food startup to validate and launch an innovative business model to expand market opportunity.
Speaker 2: And the second with peak origin, a food startup, the validate and launch an innovative business model to expand market opportunities.
Speaker 2: PA continues to be an exciting part of Jacob Sportfolio into the crucial part of our new strategy as we continue to grow in the consulting and advisor space.
It continues to be an exciting part of Jacobs portfolio and is a crucial part of our new strategy as we continue to grow in the consulting and advisory space.
Over to you Kevin.
Thanks, Bob.
Speaker 3: Thanks, Bob. Now turning to slide 10 for a financial overview of first quarter fiscal 2022 results.
Now turning to slide 10 for a financial overview of first quarter fiscal 2022 results.
Speaker 3: Gross revenue was flat year over year, earned by a decrease in pasture revenue, with net revenue at 6% and down 3% performance for acquired revenues.
Gross revenue was flat year over year, driven by a decrease in pass through revenue with net revenue up 6% and down 3% pro forma for acquired revenue.
Speaker 4: Before NetRevenue Growth was impacted by the timing of large CMS wins and PMP at America's customers evaluating investments from the recently past US infrastructure bill. I'll explain the dynamics a bit further during the review of the lines of business performance.
<unk> net revenue growth was impacted by the timing of large gms wins and <unk> Americas customers evaluating investments from the recently passed U S infrastructure Bill I'll explain these dynamics that further during his review of the lines of business performance adjust.
Speaker 4: Adjust the gross margin in the quarter as a percentage in that revenue was 27.4% up 430 basis
Adjusted gross margin in the quarter as a percentage of net revenue was 27, 4% up 430 basis points.
Speaker 4: Consisting with the last few quarters, the year-over-year increase in gross margin was driven by a favorable revenue mix in both P and PS, CMS, as well as the benefit from PA consulting, which has a strong accretive gross margin to the total JGS portfolio.
Consistent with the last few quarters the year over year increase in gross margin was driven by a favorable revenue mix and both Pete MTS CMS as well as the benefit from Ta consulting, which has a strong accretive gross margin for the total Jacobs portfolio.
Speaker 4: We expect Grossmark in as a percentage of net revenue to remain in the 26 to 27% range for the remainder of fiscal 2022. As we execute against our strategy to drive a higher technology and consulting revenue mix, longer term our Gross margins will expand.
We expect gross margin as a percentage of net revenue to remain in the 26% to 27% range for the remainder of fiscal 2022.
We executed against our strategy to drive a higher technology and consulting revenue mix longer term, our gross margins will expand.
Adjusted G&A as a percentage of net revenue was up year over year to 17%.
Speaker 4: A guess of GNA as a percentage in that revenue was up year over year to 17%. Within GNA we saw an increase in medical costs higher than our expectations, indicating some pent up demand for medical care near the end of the annual plant period which ends on December 31st.
Within G&A, we saw an increase in medical costs higher than our expectations, indicating some pent up demand for medical care near the end of the annual plan period, which ends on December 31.
GAAP operating profit was $177 million and was mainly impacted by a $72 million largely non cash charge associated with our strategic reduction in our real estate footprint as.
Speaker 4: Gap operating profit was $177 million, and was mainly impacted by a $72 million largely non-cash charge associated with a strategic reduction in our real estate footprint, as well as $47 million of amortization from acquired and tangible.
As well as $47 million of amortization from acquired intangibles.
The real estate downsizing as a result of our ability to further leverage technology as we adapt to our new strategic ways of working.
Speaker 4: The real estate downsides are the result of our ability to further leverage technology as we adapt to our new strategic ways of working. We are finding that our teams enjoy this flexibility and we continue to see productivity increases in this regard.
We're finding that our teams enjoy this flexibility and we continue to see productivity increases in this regard.
Adjusted operating profit was $308 million up 19% driven by Ta posting strong double digit growth in operating profit during the quarter versus their year ago figure.
Speaker 4: Adjusted operating profit was 308 million of 19%. Driven by PA posting strong double digit growth and operating profit during the quarter versus their year of gofision.
Our adjusted operating profit and net revenue was nearly 11% up 110 basis points year over year on a reported basis.
Speaker 4: Our adjusted operating profit in that revenue was nearly 11%. Up 110 basis points year over year on a reported basis.
GAAP EPS from continuing operations rounded to $1 three per share and included a 41 charge related to the previously mentioned downsizing of our real estate footprint.
Speaker 4: Gap ETS from continuing operations rounded to $1.3 per share and included a 41 cent charge related to the previously mentioned downsizing of our real estate booklet, a 23 cent charge related to our amortization of acquired and fanciables.
23 charge related to our amortization of acquired intangibles.
Speaker 4: by sense of transaction and other restructuring costs, which continue to trend significantly lower, and a positive 16 cent tax benefit in the quarter. Effectively lowering are expected adjusted tax rate for the year to approximately 22%.
<unk> <unk> of transaction and other restructuring costs, which continue to trend significantly lower and a positive 16 tax benefit in the quarter effectively lowering our expected adjusted tax rate for the year to approximately 22%.
Speaker 4: excluding these items. First quarter, adjusted EPS was $1.56.
Excluding these items first quarter adjusted EPS was $1 56.
Speaker 4: During the quarter, PAs continued strong performance, contributed 23 cents of accretion, net of incremental interest.
During the quarter ph continued strong performance contributing 23 sacks.
<unk> accretion net of incremental interest.
Speaker 4: Jacob's solidated Q1 adjuster, but DA was $310 million, and was at the 11% year over year, and represented 11% of their revenues.
Jacobs consolidated Q1, adjusted EBITDA was $310 million and was up 11% year over year and represented 11% of net revenue.
Speaker 4: Finally, turning to our bookings during the quarter, we posted a robust book to bill ratio of 1.4 times for Q1, driven by strength in both lines of business. The strong booking performance positions as well, for the developing growth momentum we expect over the remainder of fiscal year 2022.
Finally, turning to our bookings during the quarter, we posted a robust book to Bill ratio of one four times for Q1, driven by strength in both lines of business.
Strong booking performance positions us well for the developing growth momentum, we expect over the remainder of fiscal year 2022.
Regarding our LLP performance, let's turn to slide 11.
Speaker 4: Regarding our LLB performance, let's turn to slide 11.
Speaker 4: Starting with CMS, Q1 2022 revenue was down 10% year over year and 12% on a performance basis.
Starting with CMS Q1, 2022 revenue was down 10% year over year and 12% on a pro forma basis.
Speaker 4: CMS Revenue Growth continued to be impacted by the contract one-off of a large, low margin procurement contract and timing related to our transition on another large DOE contract.
CMS revenue growth continued to be impacted by the contract one off of a large low margin procurement contract and timing related to our transition on another large DLA contract.
Speaker 4: The combined year over impact of the two contracts was approximately $220 million.
The combined year over year impact of the two contracts is approximately $220 million.
Speaker 4: When excluding the contract runoff, performance CMS revenue growth was at 5%, indicating a strong underlying positive growth profile. As a result, we expect CMS Q2 revenue to show solid growth, but second half 2022 revenue growth accelerating further, as recent new wins and backlog begin to burn.
When excluding the contract runoff pro forma CNS revenue growth was up 5%, indicating a strong underlying positive cost profile.
As a result, we expect same Tms Q2 revenue to show solid growth with second half 2022 revenue growth accelerating further as recent new wins and backlog begin to burn.
Speaker 4: For the full fiscal year, we expect reported revenue growth to be about 5%. Well, portions of our CMS portfolio are seeing some hindrance, headlands, associated with the unresolved continuing resolution in Washington. The diversity and strength of our balanced portfolio will more than offset that and drive solid organic growth.
For the full fiscal year, we expect reported revenue growth to be above 5%, while portions of our CMS portfolio are seeing some headwind headwinds associated with unresolved continuing resolution in Washington, the diversity and strength of our balanced portfolio will more than offset that and drive solid organic.
<unk> growth.
TMS Q1, operating profit was $111 million up 1%.
Speaker 4: CMS Q1 operating profit was $101 million, up 1%. Operating profit margin was 110 basis points year over year to 9.6%. The improvement for the quarter in operating margin was driven by our strategy to focus on higher margin opportunities across the business, as well as the timing related to transition of our large DOE counter.
Operating profit margin was up 110 basis points year over year to nine 6% improved.
The improvement for the quarter and operating margin was driven by our strategy to focus on higher margin opportunities across the business as well as the timing related to transition of our large daily compounds. We expect operating profit margin to remain in the 8% to 9% range through the balance of fiscal 2022, but <unk>.
Speaker 4: We expect operating profit margin to remain in the 8 to 9% range through the balance of fiscal 2022, but improve longer term, but that revenue makes from higher margin wins improved.
Longer term as our revenue mix from higher margin wins improved.
Speaker 4: Moving to PMPS, Q1 net revenue was up 1% year over year. Our advanced facilities business net revenue growth was up double digits year over year, driven by the investments in the semiconductor supply chain. We expect advanced facilities to further accelerate its growth throughout fiscal 2022.
Moving to PMT US Q1, net revenue was up 1% year over year, our advanced facilities business net revenue growth was up double digits year over year, driven by the investments in the semiconductor supply chain, we expect advanced facilities to further accelerates.
<unk> growth throughout fiscal 2022.
Speaker 4: Our international business also had strong double-digit year-over-year growth driven by more steady government funding and is favorable first quarter fiscal 2021 year-over-year compare.
Our international business also had strong double digit year over year growth driven by more steady government funding and a favorable first quarter of fiscal 2021 year over year compare for.
Speaker 4: For the remainder of fiscal 2022, we expect solid mid-singles digit net revenue growth for our international business.
For the remainder of fiscal 2022, we expect solid mid single digit net revenue growth for our international business.
Moving to PMT as Americas current revenues remained soft due to the delayed approval of the infrastructure. Bill. However, we are beginning to see some projects related to the infrastructure bill enter into our pipeline.
Speaker 4: Moving to P and P.S. America's current revenues remain soft due to delayed approval of the infrastructure bill. However, we are beginning to see some projects related to the infrastructure bill enter into our pipeline.
Speaker 4: Our first quarter bookings and rising backlog provide us confidence that the America's business will show us a potential growth as we work through the balance of our fiscal year 2022.
Our first quarter bookings and rising backlog provide us confidence that the Americas business will show sequential growth as we work through the balance of our fiscal year 2022.
Speaker 4: PMPS Q1 operating profit was down 2% year over year, with a 13.2% operating profit margin. During by increased G&A expenses, as we remain committed to strategic investments that position us for the projected acceleration in our business longer term.
Pmt's Q1, operating profit was down 2% year over year with a 13, 2% operating profit margin driven by increased G&A expenses as we remain committed to strategic investments that position us for the projected acceleration in our business longer term.
Speaker 4: In terms of PAs performance, PAs contributed $290 million in revenue and 63 million in operating profit for the quarter. Q1 revenue could 21% year-over-year in both US dollars and minor.
In terms of Ta's performance.
<unk> contributed $290 million in revenue and 63 million in operating profit for the quarter.
Q1 revenue grew 21% year over year.
In both U S dollars and pound Sterling Q.
Speaker 4: If you want adjusted operating profit margin was 22%. From the next slide, I will provide an additional overview of P.H. financial profile.
Q1, adjusted operating profit margin was 22% on the next slide I will provide an additional overview of <unk> financial profile.
Speaker 4: Our non-allocated corporate cost will $58 million, up year over year, and slightly higher than our expectations. Durant primarily got the increases in medical costs. We still expect non-allocated corporate costs to be in the range of $200 to $250 million for fiscal year 2022.
Unallocated corporate costs were $58 million up year over year, and slightly higher than our expectations driven primarily by the increases in medical costs, we still expect non allocated corporate costs to be in the range of $200 million to $250 million for fiscal 'twenty two.
Speaker 4: Moving to sites well, we are approaching the year since we closed this good 65% investment in PA consulting and their performance has exceeded our expectations.
Moving to slide 12.
We are approaching a year since we closed the 65% investment in PAA consulting and their performance has exceeded our expectations.
Speaker 4: TIA Consulting provides a unique combination of high values, strategic and digital consulting services to a diverse group of public and private clients. The exposure to these high growth sectors is reflected in the company's ability to compound high double digit revenue growth while maintaining operating profit margins well about 20%.
<unk> consulting provides a unique combination of high value strategic and digital consulting services to a diverse group of public and private clients.
Exposure to these high growth sectors as reflected in the company's ability to compound high double digit revenue growth, while maintaining operating profit margins well above 20%.
Speaker 4: Interestingly, U.S. publicly traded consultancies that have this type of financial profile are valued at more than 20 times a death of either DA, indicating that PAs performance profile offers upside to Jacob's current valuation. At our upcoming investor event, we will provide further insights into PAs growth strategy.
Interestingly U S publicly traded Consultancies that have this type of financial profile are valued at more than 20 times adjusted EBITDA, indicating that Ta's performance profile offers upside to jacobs' current valuation.
At our upcoming Investor event, we will provide further insight into <unk> growth strategy.
Turning to slide 13, and discuss our cash flow and balance sheet.
Speaker 4: Turning to slide 13, discuss our cash flow and balance sheet. We had another outstanding quarter of cash flow generation, the $302 million and reported through cash flow as BFO again showed strong improvement down, down eight days year over year. And the quarter's cash flow included $55 million cash payment for COVID related deferred by the tax payment.
We had another outstanding quarter of cash flow generation that $302 million and reported free cash flow as DSO again showed strong improvement down eight days year over year and the quarters cash flow included.
$55 million cash payment for Covid related deferred FICA tax payments.
Next quarter, we expect free cash flow to be impacted by cash bonus payments associated with our year end performance higher cash taxes, and an uptick in our DSO figures given some discrete items that favorably impacted our Q1 results.
Speaker 4: Next quarter, we expect free cash flow to be impacted by PA's cash bonus, payments associated with their year-end performance, higher cash taxes, and an uptick in our DSL figures, given from discrete items that favorably impacted our Q1 results.
Speaker 4: Given a strong Q-1 free cash flow performance and structural improvements in our collection processes through our focus 2023 initiatives, we see increased conviction of receiving our one-time free cash flow conversion target.
Given our strong Q1 free cash flow performance and structural improvements in our collection processes through our focus 2023 initiatives, we see increased conviction of achieving our one times free cash flow conversion target.
As a result of our strong cash flow we ended the quarter with cash of one key.
Speaker 4: As a result of the strong cash flow, we ended the quarter with cash of $1.2 billion and a gross debt of $3.1 billion. Resulting in 1.9 billion of net debt. Our performance net debt to expected adjusted 2022 either DA is approximately 1.3 times a clear indication of the continued strength of our balance.
$2 billion.
And our gross debt of $3 1 billion, resulting in $1 9 billion of net debt.
Pro forma net debt to expected adjusted 2022 EBIT da is approximately one three times a clear indication of the continued strength of our balance sheet.
Speaker 4: Finally, given a strong balance sheet and free cash flow, we remain committed to our quarterly dividend, and we recently announced an increase of 10% to 23 cents per share. Now I'll turn it back over to...
Finally, given our strong balance sheet and free cash flow, we remain committed to our quarterly dividend and we recently announced an increase of 10% to 23 cents per share.
Now I'll turn it back over to Steve.
Thank you Kevin.
Speaker 3: Our purpose to create a more connected, sustainable world has never been more relevant than now. As advances in data analytics and edge computing power are unlocking our ability to deploy innovative technologies related to climate change, infrastructure, and national security.
Our purpose to create a more connected sustainable world has never been more relevant now as advances in data analytics and edge computing power.
Blocking our ability to deploy innovative technologies related to climate change infrastructure and national security.
Speaker 3: Our proactive portfolio management to align ourselves to these long-term secular growth opportunities has provided us the ability to grow under multiple economic scenarios in even during the pandemic.
Our proactive portfolio management to align ourselves to these long term secular growth opportunities has provided us the ability to grow under multiple economic scenarios and even during the pandemic.
Speaker 3: We are now entering a stage where we are experiencing growth across all of Jacobs. We expect accelerating top line growth throughout the rest of this fiscal year.
We are now entering a stage, where we are experienced growth across all of Jacobs, we expect accelerating topline growth throughout the rest of this fiscal year.
We are maintaining our fiscal 2022 outlook for adjusted EBITDA to be in the range of $1 37 to 145 billion.
Speaker 3: We are maintaining our fiscal 2022 outlook for just the that to be in the range of $1.37 to $1.45 billion. And our adjusted EPS outlook of 685 to 745.
And our adjusted EPS outlook of 685 to 745.
Speaker 3: Beyond the current fiscal year, our sales pipeline and robust end markets indicate continued strong performance.
Beyond the current fiscal year, our sales pipeline is robust and markets indicate continued strong performance.
As I stated earlier, we anticipate approximately $10 of adjusted EPS in fiscal 2025 with a potential for upside driven by deploying additional investment in our growth accelerators of climate response data and high value consultancy.
Speaker 3: As I stated earlier, we anticipate approximately $10 of adjusted EPS at fiscal 2025, with the potential for upside driven by deploying additional investment in our growth accelerators of climate response, data, and high value consultancy. Operating will-
Operator, we'll now open the call for questions.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Speaker 4: At this time, I'd like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. Please limit yourself to one question. If you wish to ask a follow-up question, please press star one to re-enter the queue. And your first question comes from a line of jving cook from Credit Suisse. Your line is open.
These limit yourself to one question if you wish to ask a follow up question. Please press star one to reenter the queue.
And your first question comes from the line of Jamie Cook from Credit Suisse. Your line is open.
Speaker 5: Hi, good morning. I guess one question, understanding, well, congrats on the win on TMS in terms of the award, the space award, but.
Hi, Good morning, I guess, one question understanding well congrats on the wind on CMS in terms of the award the Space Award, but and at what point I know you said margins this year sort of in the 8% to 9% at what point do you think the EMS margins Ken.
Speaker 5: And you know, at what point, I know you said margins this year, sort of in the eight to nine percent. At what point do you think CMS margins can, you know, start to, you know, now are the gap, when can you start to now are the gap between CMS and PPS margins?
Start to you.
The gap when can you start to narrow the gap between CMS and Pts margins.
Speaker 5: And then I guess my second just follow up question. Obviously there's been a lot of news about semi-capac from some major customers until some pretty sizable numbers a couple weeks ago. If you could just sort of frame the opportunity for Jacob Sazza relates to that and when we could start to see that in numbers. Thanks.
And then I guess my second just follow up question, obviously, there has been.
A lot of news about semi capex.
From some major customers.
<unk> announced.
It's a pretty sizable numbers a couple of weeks ago, if you could just sort of frame.
The opportunity for Jacobs as it relates to that and when we can start to see that numbers. Thanks.
Speaker 4: So let me take the first part for sure, Jamie, this is Kevin. On the CMS margin profile, what we're going to be seeing in the last three quarters of this year is the ramp up of our large Idaho nuclear contract, which is, as you know, has as a slightly lower margin profile than the balance of the business. So that's what.
Got it.
Let me take the first part for sure. Jamie This is Kevin on the CMS margin profile, but we're going to be seeing in the.
<unk>.
The last three quarters of this year as the ramp up of our large Idaho nuclear contract, which is as you know has as a slightly lower margin profile than the balance of the business. So that's what's creating the 8% to 9% kind of figures that we talked about for the balance of the year as we go into 'twenty, three and beyond though we really do.
Speaker 4: creating the eight to nine percent kind of figures that we talked about for the balance of the year. As we're going to 23 and beyond though, we really do believe that the ramp up of the satellite work and various other items that are in backlog and or in the pipeline which we expect some success on will result in us being able to start to build that margin profile up again. Hopefully beyond 9 percent in 2023.
<unk> that the.
The ramp up of the satellite work and various other items that are in backlog and or in the pipeline, which we expect some success on will result in us being able to start to build that margin profile up again.
Hopefully beyond 9% in 2023.
And Jamie on the on the semiconductor side clearly.
Speaker 2: and Jamie on the, on the center clear side clearly.
Speaker 2: It's a growing part of our overall portfolio. We've been in the space for over 20 years and the customer that we've been on the...
It's a growing part of our overall portfolio. We've been we've been in this space for over 20 years and the customer that we've kind of been on the on the on the forefront is in fact, Intel and proud that we could even announced that for years that we couldn't previously so.
Speaker 2: on the forefront of his, in fact, Intel and proud that we could even announce that for years that we couldn't previously. So you will start to see it in the numbers as it becomes even a bigger part of our portfolio. But I think the good news is that as Intel diversifies not only in the US, but outside the US, we're right there with them as their critical technical and insurance partner. So that's gonna be a big piece for business.
You will start to see it in the numbers as it becomes even a bigger part of our portfolio, but I think the good news is that as Intel diversified not only in the U S, but outside the U S.
We're right there with them.
They are critical.
Technical and engineering partner, so that's going to be a big piece of our business.
Your next question comes from the line of Jerry Revich from Goldman Sachs. Your line is open.
Speaker 4: Your next question comes from a line of Jerry Revit from Goldman Sachs. Your line is open.
Yes, hi, good morning, everyone.
Speaker 2: On this line, 16, eight folks laid out a $5 billion ESU solutions revenue business. I'm wondering if you want not just fleshing out the major components. I know water is about $2 billion or so. What are the major pieces and what's the growth cadence that you're looking for in those lines of business? 22, 23 timeframe. In other words, how back I'm loaded as that growth outlook. Thank you. Layout.
On slide 16, you folks laid out a $5 billion ESG solutions revenue business I'm wondering if you wouldn't mind just flushing out the major components I know water is about $2 billion or so what are the major pieces and.
What's the growth cadence that you are looking for in those lines of business.
'twenty three time frame.
Other words, how backend loaded.
Loaded is that growth outlook.
Lay out on that slide.
So.
Speaker 6: Nice,
Sure we're going to this is going to be a big topic for us coming up an investor day, Buster whole investor, but Jerry so not too.
Speaker 3: Here, we're gonna, this is gonna be a big topic for us coming up in investor day, investor, whole investor event, Jerry. So not to deflect the detail side of your question, but I think we're gonna lay all that out, and it's gonna be pretty exciting. The, you know, it's unfolding now every quarter. I mean, the winds that, you know, we talked about, you know, Bob mentioned this, you know, first ever.
The detailed side of your question, but I think we're going to lay all that out that's going to be pretty exciting.
<unk>.
It's unfolding now every quarter I mean, the wins that we.
We've talked about.
And this.
First ever.
Speaker 3: Jacob's opportunity to do the first ever in fact the charging system on a public road in the Midwest is a great example. What we're now doing in the US and Europe to address resiliency and renewable energy.
Jacobs.
Opportunity through the first ever inductive charging system on a public road.
West is a great example of what we're now doing in the U S and Europe two two.
To address resiliency.
In renewable energy.
Speaker 3: logistics with underground tables, you know, the PNG one being the specific opportunity, green hydrogen, you know, we've got a huge wind program, several big huge wind programs across the globe. These are all unfolding now and will be ramping up that number that you quoted.
<unk> with underground cables, the PNG, one being the specific opportunity green hydrogen.
We got a huge win program several big huge wide programs across the globe. These are all unfolding now and will be ramping up.
That number that you quoted literally every.
Speaker 3: literally every quarter as we proceed. So we're going to get into that detail, but it's everything from decarbonization, energy transition, resilience, mitigation, adaptation. It's and we'll be spelling out some specific growth targets during the investor week.
Every quarter.
We proceed so we're going to get into that detail, but it's everything from de carbonization energy transition resilience mitigation adaptation.
And we'll be spelling out some specific growth targets during the rest of the week.
Speaker 4: Your next question comes from a line of Josh Sullivan from the benchmark company. Your line is open.
Your next question comes from the line of Josh Sullivan from the Benchmark Company. Your line is open.
Hey, good morning, Thanks for taking the question.
Speaker 2: Hey, good morning. Thanks for taking the question. Within the rapid solutions in the space assets you're building out. Can you just help us break down those verticals and what you're thinking about, putable, dressable, market here? And then, and then, and then, relatively, that aerial imagery data contract, I think you said on the Geo pod. Can you just expand on that opportunity and the customer stuff there as well? Sure.
Within the rapid solutions in the space assets Youre building out can you just help us break down those verticals and what Youre thinking about total addressable market here and then relatedly that aerial imagery data contract I think you said on the <unk>.
Todd can you just expand on that opportunity in the customer set there as well.
Sure.
So Josh the first part of the question is is that if you look at kind of the.
Speaker 3: If you look at kind of the the the cyber spectrum
The cyber spectrum.
Speaker 3: and then how it pertains to the overall ISR approach, I'd kind of break it down into four main areas on where we play and then there's the product component of it as well.
And then how it pertains to the overall ISR approach I'd kind of break it down into four main areas on where we play in.
And then there is the product component of it as well so the whole perspective around readiness operation insight and then new product development on creating platforms in order to provide more security or more readiness or more insights is kind of how we look at it in over the over the years the ACA.
Speaker 2: The whole perspective around readiness operations inside and then new product development on creating platforms in order to even provide more security or more readiness or more insights is kind of how we look at it and over the years the acquisitions that we've done have now put us in a pretty premier spot of that.
Positions that we've done have now put us in a pretty premier spot.
So I think that that is something that that is going to continue to grow and puts us in multiple parts of that value chain.
Speaker 3: So I think that that is something that is going to continue to grow and put this in multiple parts of that value chain in the ISR field.
In the ISR field on.
Speaker 2: On the second part around Geopod and what we're doing on the geostatial side, that really is an agricultural, well, there's clearly all kinds of applications as it contains the infrastructure.
On the second part around Geoponic and what we're doing on the geospatial side that really is an agricultural.
Clearly all kinds of applications as it pertains to infrastructure.
Speaker 3: The wind that I was referencing is the commercial client that looks at the whole kind of agricultural profile of right now the US, but what we have these applications that I'll swear to.
The windows.
And use of the commercial clients that looks at the whole kind of agricultural profile of.
Right now the U S. But we have these applications elsewhere too.
Speaker 2: and it really helps on weather patterns and how the whole agricultural industry can be more efficient as the effect of almost the previous question climate change come into play. So it's a nice coordinated skill set that we have that even makes us bring that much more value for our clients.
And really helps on weather patterns and how the whole agricultural industry can can be more efficient as the effects of almost of the previous questions climate change come into play. So it's a nice it's a nice kind of coordinated.
The skill set that we have that even makes us.
Bring that much more value for our clients.
Your next question comes from the line of Chad Dillard from Bernstein. Your line is open.
Speaker 4: Your next question comes from a line of Chad Diller from Bernstein. Your line is open.
Hi, guys. Good morning, I was wondering if you can kind of sort of a little more volatile straight lines.
Speaker 7: Hi guys, good morning. I was wondering if you can tell the book a little more about the straight life, discuss cross-signing opportunities. How would you think about the sales cycle about this project? How long would you say it can you end during that pressure cycle to the discussions kick off?
Cross selling opportunities.
<unk> I think about the sales cycle about this product.
Along with Samsung.
First of all the lifecycle.
Discussions kickoff.
Yes, So let me start.
Speaker 3: Yeah, so let me start. Sir, I think what's important about street light is we've been doing business with them for the last six years. So we have a lot of experience with them and have proven success. They are validated capability trusted, especially in the DOTs department of transportation here in the US.
I think what's important about streetlight as we've been doing business with them for the last six years. So we have a lot of experience with them and have proven success.
They are a validated capability trusted, especially in the department.
Department of Transportation's here in the U S.
Although <unk> been focused on.
Speaker 3: Although, you know, they've been focused on, you know, a handful or so of these.
A handful or so of these.
Speaker 3: the property of transportation directly. And now what we bring is the opportunity to unleash that because you know, one of the leading players of transportation, not only in the US, but globally. The, you know, the whole opportunity with street light is it's a multi-modal capability, which is unique in the industry. So they're accessing data from...
Transportation directly and know what we bring is the opportunities at least that because we are the leading players in transportation not only in the U S but globally.
The whole opportunity with with the street light as a multimodal capability, which is unique in the industry. So they're accessing data from mobile devices connected vehicles geospatial Iot sensors, and then they have a very unique.
Speaker 3: mobile devices, connected vehicles, geospatial, IoT sensors, and then they have a very unique process technology and with very strong algorithms and being able to...
Technology.
With very strong algorithms and being able to.
Speaker 3: create data and visible insights that will lead to climate change solutions and being able to move infrastructure to underserved communities and the whole post of
Create data and visible insights that will lead to climate change solutions.
Being able to move infrastructure to underserved communities in a whole host of infra.
Speaker 3: infrastructure needs in the transportation sector. And then, you know, specifically from a Jacob standpoint, the big opportunity is that
Infrastructure needs in the transportation sector.
Then specifically from a from a Jacobs standpoint, the big opportunity is that we.
Speaker 3: We see the opportunity to work this technology into other infrastructure sectors where we're industry leading like water environmental building environment.
We see the we see.
Opportunity to work this technology into other infrastructure sectors, where we're industry, leading like water environmental building environment.
Speaker 3: We're able to co-develop new products with them, bring this internationally, especially in areas like UK, where we're a major player in transportation and other markets in Asia, etc.
We are able to co develop new products with them, bringing this internationally, especially in areas like U K, where we.
We're a major player in transportation and other markets.
In Asia et cetera.
Speaker 3: And so, you know, we see a tremendous opportunity as the reason why we expect greater than 30 percent revenue growth in this business, you know, over the next several years.
And so we.
We see a tremendous opportunity as the reason why we expect.
Greater than 30% revenue growth in this business.
Over the next several years per year.
Your next question comes from the line of Andy Kaplowitz from Citigroup. Your line is open.
Speaker 4: your next question comes from a line of Andy Coppowitz from City Group. Your line is open. Good morning guys.
Hey, good morning, guys.
Good morning, good morning.
Can you give us a little more color on how you expect the Tms trend over the year I know, Kevin you said.
Speaker 4: Do you give us a little more color on how you expect CMS to trend over the year? I know Kevin, you said, you know, still up over 5% for the year. I think that's just a little bit below your guide from last quarter. Is it possible to quantify the impact of the CRs on certainty on your Q1 revenue? And have you seen any incremental interruption in Q2 or a moment crown or supply chain? And do you need to display revenue? You do need to display relatively significant acceleration revenue to make your gun. So you could just talk about your confidence in that.
It's still up over 5% for the year I think that's just a little bit below your guide from last quarter is it possible to quantify the impact of the Sears uncertainty on your Q1 revenue and have you seen any incremental interruption in Q2, among mccann or supply chain.
Need to display.
You do need to display relatively significant acceleration revenue to make a guy and so you can just talk about your confidence in that.
Yeah.
Yes, I think we feel pretty pretty darn confident actually theres a couple of things that are going on.
Speaker 4: Yeah, and we feel pretty darn confident actually. There's a couple things that are going on.
Speaker 4: The year ago comparison starts to dramatically change because of those two contracts having fallen off the year ago comparables.
The year ago comparison starts to dramatically change because because of those two contracts, having fallen off and the year ago comparable.
Speaker 4: to a large extent. So by default that underlying growth that we're showing actually in Q1 of 5%.
To a large extent so by by default that underlying growth that we're showing actually in Q1 of 5%.
Speaker 4: is going to do nothing but get better as it relates to the numbers. So while the kind of the headline number was the fall-off and revenue, the underlying health of the businesses is at that number. We talked about five.
We're going to do nothing but get better.
As it relates to to the numbers. So so while the kind of the headline number was a falloff in revenue the underlying health of the businesses is that that that number we talked about 5%. So you got the the ramp up of the Idaho project, which is going to be a substantive build in Q2 and then three.
Speaker 4: So you've got the ramp up of the Idaho project, which is gonna be a substantive build in Q2 and then three and four as well. And look, I think the continuing resolution is impacting the piece of the portfolio that you would expect primarily in the areas of what's called a cyber.
And four as well.
And look I think the continuing resolution is impacting the piece of the portfolio that you would expect it primarily in the areas of.
Let's call it cyber.
Speaker 4: intelligence communities, but that, well, that's an important part of our portfolio. Portfolio, it's not the biggest part.
Intelligence communities, but that while that's an important part of our.
Portfolio Thats not the biggest part.
Speaker 4: And so we're seeing some slow down there, but we also see backlog and winds just waiting to be executed again. And we see all of that being able to happen. Little less than Q2, but certainly Q3 and 4. So the ramp is certainly robust in the remainder of the year. And especially in Q3 and Q4.
So we're seeing some slowdown there, but we also see backlog and wins just waiting to be to be executed against and we see all of that being able to happen.
Nonetheless in Q2, but certainly Q3 and four so the ramp is certainly.
Robust in the remainder of the year and especially in Q3 and Q4.
Speaker 8: Your next question comes from a line of Stephen Fisher from UBS. Your line is open.
Your next question comes from the line of Steven Fisher from UBS. Your line is open.
Speaker 8: Great, thanks. Good morning. I guess related to the P and PS segment, I know there's typically some seasonal headwinds in Q1 relative to Q4 of the prior year. I guess the organic growth seemed to be relatively steady. I'm wondering, is there, how did that compare to your expectations of the quarter? And is there any evidence you can give us today that
Great. Thanks, good morning.
I guess related to the Pnp.
I know, there's typically some seasonal headwinds.
In Q1 relative to Q4 of the prior year.
I guess the organic growth seem.
Seem to be relatively steady I'm wondering is there.
How does that compare to your expectations in the quarter and is there any evidence you can give us today that.
Speaker 8: The America's design business growth rate is actually accelerating now on a sequential basis or is it moral just poised to come, and that just still needs to play out of the rest of the...
The Americas design business growth rate is actually accelerating now on a sequential basis or is it more just poised to come.
And that just still needs to play out over the rest of the year develops.
Yes.
Speaker 3: Yes, I think you think yes, the second part of your question first, we do see a growing pipeline in our America, this is the structure business, and that's coming through in the booking. And so, talked about the backlog growth to the entire to the yellow V.
I'd say two things yes.
The second part of your question first we do see a growing pipeline in our America's infrastructure business and that's coming through in the bookings and so talk about the backlog growth for the entirety of the yellow.
Speaker 2: This are our design business in the US, specifically, are on infrastructure probably led the way on that backlog growth that we saw. So clearly on the base business, without even the infrastructure bill, we're seeing the growth there. And then as the infrastructure bill, we're starting to see some, some pale winds coming in, at least on a project basis from that too. So.
Our design business in the U S. Specifically around infrastructure, probably led the way on that backlog growth that we saw so so clearly on the base business without even the infrastructure Bill we're seeing the growth there and then as the infrastructure build we're starting to see some some.
Some tailwind coming in at least on a on a project basis from that too so.
Speaker 3: We're positive on that front. From a feats andality standpoint, I say that it goes back to what Kevin said earlier.
We're positive on that front from a Steve.
Seasonality standpoint.
I'd say that it goes back to what Kevin said earlier, we saw growth. We also saw some cost come in with regards to medical costs and otherwise.
Speaker 2: We saw growth. We also saw some costs come in with regards to medical costs and otherwise, as well as preparation for people that we know are gonna be full utilization as we progress the year. So we like what we say.
As well as preparation for for people that we know are going to be full utilization as we.
We progressed the year, so we like we like what we see.
Speaker 4: Just to maybe add a little bit there, is that you talked about sequential numbers, and we would expect that Q1 of the year is gonna be the low point for the America's business, and we will start to see sequential growth going off of those numbers through the balance of the year.
Just maybe add.
There is that the.
You talked about sequential numbers and we would expect that.
Q1 of the year is going to be the low point for the for the Americas business and we will start to see sequential growth going after those numbers through the balance of the year.
Speaker 8: Your next question comes from the line of Sean Eastman from Keybank Capital Markets. Your line is open. Thanks.
Your next question comes from the line of Sean Eastman from Keybanc capital markets. Your line is open.
Hi team Thanks for taking my question.
I just wanted to come back to the satellite payload Technology award in the quarter I believe this is one that you guys had highlighted.
Speaker 9: I just wanted to come back to the Satellite Payload Technology Award in the quarter. I believe this is one that you guys had highlighted as.
Speaker 9: you know, sizable prospects, but you know, maybe the more important element around it was that it was a platform for margin of creative growth in CMS. Could you maybe refresh us on that dynamic? Obviously, you know, if you could put numbers on it, that'd be great, but I just wanted to check back in there and make sure we understand the significance of that win.
Sizable.
Prospects, but maybe the more important element around it was that it was a platform for margin accretive growth.
CNS.
Can you maybe refresh us on that dynamic obviously.
If you could put numbers on it that would be great, but just wanted to check back in there and make sure we understand the significance of that win.
Thank you.
Speaker 3: Thank you. Yeah, I think this is the sort of anticipated win. And we're very limited what we can talk about because of the classified nature. But.
I think the.
This is the sort of anticipated.
When.
And we're very limited in what we can talk about because the duplex by nature, but.
Speaker 3: It's got a phasing approach to it, but this was the critical phase to win. And so now the momentum's gonna start to build.
It's got a phasing.
Approach to it but this was the critical phase.
And so so now the momentum is going to start to build.
Speaker 3: And again, we're going to provide some more information during the best of week. But what we see is that the way this thing can face over the next several years and what it's got us into now is an opportunity to create a half a billion dollar rapid solutions business. And we'll provide some more details of how we see that sort of unfolding when we get the best of week.
Well again, we're going to provide some more information during the rest of the week, but.
What we see is that the.
This thing can phase over the next several years.
And what it's got the center now has an opportunity to create a $5 billion rapid solutions business.
We'll provide some more details of how we see that sort of a bold and when we get the best week.
Speaker 4: And that starts to happen primarily in 23, the build on the project. So the ramp will be likely most land 23.
And that starts to happen primarily in 2003.
The build on the project so the ramp will be likely most land 2003.
So those other clients.
Speaker 8: Your next question comes from a line of Andy Whitman from Barrett. Your line is open.
Your next question comes from the line of Andy Wittmann from Baird. Your line is open.
Speaker 8: Great, thanks guys for taking my question. I guess I just want to touch base with you and get your thoughts on the labor market and the ability to find and keep talent today. Certainly this is a 400, many people's minds and I wanted to understand how you're dealing with that today, what you're seeing in that marketplace. And if there's any net effect on the margin performance this year that you can discern from the rapidly changing and inflationary into the labor market.
Okay. Great. Thanks, guys for taking my question I guess I just wanted to touch base with you and get your thoughts on the labor markets and the ability to find and keep talent. Today. Certainly this is at the forefront of many people's minds and I wanted to understand.
How you are dealing with that today, what youre seeing in that marketplace and if theres any net effect on the margin performance. This year that you can discern from the rapidly changing.
Inflationary labor market.
Yeah, Andy It is it is a tough market and I think that.
Speaker 2: Yeah, Andy, it is a tough market. And, but we, you know, I think the cultural priorities that we've been focused in on over the five plus years is really starting to, well, it has been saying dividends, but it's continuing to be on the forefront. So, yes, there's challenges. Our attrition levels are remaining actually pretty steady.
The cultural priorities that we've been focused in on over the five plus years is really starting to look at is has been paying dividends, but it is continuing to be on the forefront. So yes, theres challenges are our attrition.
<unk>, our remaining actually pretty steady.
Speaker 2: And, you know, we're confident that we'll continue to be able to grow despite those labor challenges. The other part I would say is that
And.
We're confident that we will continue to be able to grow.
Despite those those labor challenges the other part I would say is.
Speaker 2: This is where the morality of our business really, really makes it different.
This is where the <unk> of our business really really makes.
Makes a difference because we are able to.
Speaker 2: because we are able to, you know, source talent and expertise from our global platforms to deliver solutions locally.
Source talent and expertise from our global platforms to deliver solutions locally.
Speaker 2: And that has really been expensuated and magnified during this period of some labor dynamics. So we feel like we're really well positioned for it.
And that has really been accentuated and magnified during this period of.
Some some some labor dynamics, so we feel like we're really well positioned board.
Your next question comes from the line of Michael Dudas from vertical research. Your line is open.
Speaker 8: Your next question comes from a line of Michael Duda from Vertical Research. Your line is open. Good morning everybody.
Good morning, everybody.
Good morning, Michael.
Okay.
Bob.
So for.
Speaker 8: If you're Steve, you now street like this quarter, black links last quarter.
Steve.
You announced the street light this quarter Black <unk> last quarter.
Speaker 2: I'm sure you'll live more on the investor day, but maybe the thought
I'm sure you will elaborate more on Investor day, but maybe.
Maybe the thought on.
How what type of again, where you're looking the size that we've been seeing the last couple of acquisitions, that's something that investors may look to see going forward unless something sizable occurs.
Speaker 8: know how the type of again where you're looking the size that we've been seeing the last couple of acquisitions and something and investors may look to see going forward and let's up things.
Speaker 8: sizable occurs and You know relative to the balance sheet that you have now and certainly adjusting from your primary acquisitions The couple of you have to What about that? That's that's all that required
And relative to the balance sheet that you have now and certainly adjusting from your prior acquisitions. The comfort level you have to look that up.
Foothold required.
Look just to.
Put a perspective on that question because it really is important of what you brought up is that we.
Speaker 3: put a perspective on that question because it really is important of what you brought up is that, we've been involved as a company over the last five to 10 years in the NASA Intelligence Arena fund.
We've been we've been evolved as a company over the last five years to 10 years and the.
Massa Intelligence Arena.
Speaker 3: on big data and digital transformation, intelligent assets. And so now, taking that platform and with the acquisitions of PW, Buffalo Group, Black Links and Street Light over the last three years or so. And then, at on top of that, our new venture capital strategy of seed investments and partnerships with the likes of Hawkeye 360 and Microgrid Labs.
On big data.
Digital transformation intelligent assets, so now taking that platform with the acquisitions of Tw Buffalo Group Black links on Street lights.
Over the last.
Three years, or so and then add on top of that our new venture capital strategy.
The investments are partnerships with the likes of Hawkeye 360, micro micro grid labs.
Speaker 3: And then a big data partnership ecosystem that we've developed and putting that all together, we are now poised and positioned with a large scale capability for transformative data solutions across all of our Jacobs domains. And that is a strategy we're gonna continue to build on.
And then a big data partner ecosystem that we've developed.
Putting that altogether.
We are now poised and positioned with a large scale capability.
Transformative data solutions across all of our Jacobs domains.
As a strategy, we're going to continue to build on.
Speaker 3: In addition to climate, which we talked about earlier in this call, the default data solution.
In addition to climate, which we've talked about earlier in this call this whole data solutions.
Speaker 3: It's going to be a big part of what we're going to talk about in the investor week and touch on the rest of your questions as we go forward.
It'd be a big part of what we're going to talk about in the Investor We can touch on the rest of your questions as we go forward.
Your next question comes from the line of Louie Dipalma from William Blair. Your line is open.
Speaker 8: Your next question comes from a line of Louis D. Palma from William Blair. Your line is open. You
Hey, Kevin and Bob Good morning.
Good morning, good morning, good morning.
Speaker 10: You are productizing infrastructure data solutions with street light and black links.
You are product sizing infrastructure data solutions with street Le Lac link.
Speaker 10: How did cyber fit into your infrastructure data solution strategy? And for context, in December , US cyber command created a cross-functional group dedicated to defending US critical infrastructure from cyber attacks. And you obviously have elite cyber talents in your critical infrastructure.
Cyber fit into your infrastructure data solution strategy and preferred contact in December .
US Cyber command created a cross functional group dedicated to defending U S critical infrastructure from cyber attack and you obviously have elite cyber talent in Europe .
Yes critical infrastructure.
Speaker 10: division from your acquisitions of the KW and Puffalo group. So can you discuss, I know you'll probably discuss more the analyst's day about how you can layer in cyber solutions into your people and places solutions, division services portfolio.
Division.
From your acquisitions at kw in Buffalo Group, So can you discuss.
I know, you'll probably discuss more at the analyst day, but how are you can layer and cyber solutions into Europe people <unk> Places solutions.
Vision services portfolio.
Louis you must you must have some some superhuman powers on I'm looking at what our deck looks like for the Investor day, but the answer is yes.
Speaker 3: that Louis must have some superhuman powers on looking at what our deck looks like for the investor day, but the insurers, yes. And it really gets exciting when you look at these are algorithms that either index.
And it really gets exciting when you look at these are these are algorithms that either index.
Speaker 2: filter or identify areas of risk in any type of data, in data set.
Filter or identify areas of risk.
In.
Any type of data and data sets and so the application of what we have to the infrastructure World is a natural transition and we have already been started we've already been working on that now that coupled with partnerships that we have in the marketplace. There's not an infrastructure project right now with major major agency.
Speaker 3: And so the application of what we have to the infrastructure world is a natural transition. And we've already been working on that now. That couple of partnerships that we have in the marketplace.
Speaker 3: There's not an infrastructure project right now with major agencies, both in the US and the UK, across the world in Australia. Well, we don't have a cyber component that's with it. So we are in process doing that right now for our clients and that's gonna become a bigger part of our business as we continue to go forward for you, appropriately said. It's a great skill set as cyber threats become, as big as any threat that we have.
It's both in the U S and the U K across the World in Australia, where we don't have a cyber component.
It.
So we are in process doing that right now for our clients and that's going to become a bigger part of our business as we continue to go forward with you appropriately.
Appropriately said, it's a great skill set.
As cyber threats become.
As big as any threat that we have.
Speaker 11: Your next question comes in line of Michael Fentagr from Bank of America. Your line is open.
Your next question comes from the line of Michael Feniger from Bank of America. Your line is open.
Hey, guys. Yeah. Thanks for taking my question I recognize you guys are touching and playing in many verticals right now and moving up.
Speaker 11: Hey guys, yeah, thanks for taking my question. I recognize you guys are touching and playing in many articles right now and moving up the tech curve. You know, the comment that peers are trading at 20 times you, but are at least a PA consulting one.
Tech curve.
Comment that peers are trading at 20 times EBITDA or at least the pega consulting ones.
Speaker 11: When I think of capital allocation here for you guys, is it favoring M&A to build out that capability? So you guys are more in that bucket and that basket? Or do you feel you are already in that basket right now? You're multiple of that at discount and maybe buying back shares to close that discount is more appealing. I guess just trying to evaluate that there's gonna be more expensive acquisitions on the forefront can build out the capabilities and get to that peer group or if you feel your capabilities are already checking the boxes and those are the right peers. Thank you.
When I think of capital allocation here for you guys is it favoring M&A to build out that capability. So you guys are more in that bucket and that basket or do you feel you are already in that basket right now youre multiples at a discount and maybe buying back shares.
To close that discount is a more appealing I guess, just trying to evaluate if theres going to be more expensive acquisitions on the forefront to build out the capabilities and get to that peer group or if you feel your capabilities are already checking the boxes and those are the right peers. Thank you.
But I think we we believe it's a combination because I do think what you comment on what we've acquired or built organically with previous M&A.
Speaker 2: But I think we believe, you know, it's a combination because I do think what you comment on, what we've acquired and built both organically and with previous M&A.
Speaker 2: We feel like we are a large scale player now. And so therefore, when we wake up every day of priorities, organic growth, top of that platform. Secondly, any acquisition we do going forward is gonna be...
We feel like we are a large scale player now and so therefore, when we wake up every day, our priority is organic growth off of that platform.
Secondly, any acquisition, we do going forward is going to be.
Speaker 3: rigorously compared to the alternative of five-back <expletive> and and basically done that the past will continue to do it.
Rigorously compare to the alternative.
Buy back stock.
We've done that in the past, we'll continue to do it.
What may have looked like.
Speaker 2: You know what what may have looked like a you know pretty bold.
Pretty bold.
Price on some previous acquisitions that are now looking at amazingly attractive.
Speaker 2: price on some previous acquisitions are now looking amazingly attractive and short periods of time and PAs a great example if you just in less than a year.
Short periods of time and <unk> is a great example, if you just have less than a year.
Speaker 3: the whole multiple profile of our acquisition is amazingly attractive. I'll just leave it like that. So I think it's gonna be a combination of going forward that we will continue to invest in Jacobs and look at our stock buybacks.
So multiple profile.
Our acquisition of <unk>.
Amazingly attractive I'll just leave it like that so.
No.
I think it's going to be a combination of going forward that we will continue to invest Jacobs.
And look at our stock buybacks.
Speaker 2: But from time to time, we're going to continue to build out this capability that we're really excited about. And, uh, but it has to be a situation where we believe over the course of the first few years, uh, we'll all look back and say it was a very attractive price and not, you know, overpaying for some, it's just because we got to get bigger. And that's, uh, I think we've proven that in the past and we'll continue to do that as the billboard.
But from time to time, we're going to continue to build out this capability that we're really excited about.
But it has to be a situation, where we believe over the course of the first few years.
We'll all look back and say it was a very attractive price.
Overpaying for something Thats, just because we got to get bigger.
I think we've proven that in the past, we'll continue to do those go forward.
Speaker 11: And there are no further questions at this time. Mr. Steve Dmitriot, I'd turn the call back over to you for some closing remarks.
And there are no further questions at this time, Mr. Steve Dimitrios I turn the call back over to you for some closing remarks.
Okay. Thank you everyone. We look forward to hopefully having the good engagement.
Speaker 12: Thank you everyone. We look forward to hopefully having the good engagement during investor week with many of you. Take care.
Investor week, but many of them take care.
This concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker 11: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker 1: You
Okay.
[music].
Okay.
Okay.