Jacobs Solutions Q1 2026 Jacobs Solutions Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Jacobs Solutions Inc Earnings Call
Today at this time, I would like to welcome you to the Jacobs solution. Fiscal first first quarter 2026 earnings conference call in webcast.
Operator: Today, at this time, I would like to welcome you to the Jacobs Solutions Fiscal Q1 2026 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. If you would like to ask a question at that time, simply press star followed by 1 on your telephone keypad. And if you'd like to withdraw that question, again, press star 1. Thank you. I would now like to turn the call over to Bert Subin, Vice President, Investor Relations. Bert, you may begin.
Operator: Today, at this time, I would like to welcome you to the`. 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. If you would like to ask a question at that time, simply press star followed by 1 on your telephone keypad. And if you'd like to withdraw that question, again, press star 1. Thank you. I would now like to turn the call over to Bert Subin, Vice President, Investor Relations. Bert, you may begin.
All lions have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number 1 on your telephone keypad. And if you'd like to withdraw that question again, press star 1, thank you. I would now like to turn the call over to Bert Zubin vice president investor relations expert you may begin.
Thank you, Krista, and welcome, everyone.
Following market closed. We issued our earnings announcement, filed our form 10q. And we have posted a slide presentation on our website, which will reference during the call.
Bert Subin: Thank you, Krista, and welcome, everyone. Following market close, we issued our earnings announcement, filed our Form 10-Q, and we have posted a slide presentation on our website, which we'll reference during the call. I would like to refer you to slide 2 of the presentation for information about our forward-looking statements, non-GAAP financial measures, and operating metrics. Now let's turn to the agenda on slide 3. Speaking on today's call will be Jacobs Chair and CEO Bob Pragada and CFO Venk Nathamuni. Bob will begin by providing comments on the business as well as highlights from our Q1 results and a recap of notable awards. Venk will then provide a detailed review of our financial performance, including commentary on end-market trends, cash flow, and balance sheet data. Finally, Bob will provide closing remarks and then we'll open up the call for questions.
Thank you, Krista, and welcome, everyone. Following market close, we issued our earnings announcement, filed our Form 10-Q, and we have posted a slide presentation on our website, which we'll reference during the call. I would like to refer you to slide 2 of the presentation for information about our forward-looking statements, non-GAAP financial measures, and operating metrics. Now let's turn to the agenda on slide 3. Speaking on today's call will be Jacobs Chair and CEO Bob Pragada and CFO Venk Nathamuni. Bob will begin by providing comments on the business as well as highlights from our Q1 results and a recap of notable awards. Venk will then provide a detailed review of our financial performance, including commentary on end-market trends, cash flow, and balance sheet data. Finally, Bob will provide closing remarks and then we'll open up the call for questions.
I would like to refer you to slide 2 of the presentation for information about or forward looking statements, non-gaap Financial measures and operating metrics.
Now, let's turn to the agenda on slide 3.
Speaking on today's call will be Jacobs chair and CEO, Bob forata and CFO bank. And at the meeting Bob will Begin by providing comments on the business as well as highlights from our first quarter results and a recap of notable Awards.
Bank will then provide a detailed review of our financial performance including commentary on and market trends, cash flow and balance sheet data. Finally, Bob will provide closing remarks and then we'll open up the call for questions with that. I'll turn it over to our chair and CEO Bob Regatta.
Good afternoon, everyone and thank you for joining us to discuss our first quarter 2026 business performance.
Bert Subin: With that, I'll turn it over to our Chair and CEO Bob Pragada.
Bert Subin: With that, I'll turn it over to our Chair and CEO Bob Pragada.
Bob Pragada: Good afternoon, everyone, and thank you for joining us to discuss our first quarter 2026 business performance. We delivered very strong results for Q1, exceeding our expectations across all key metrics and made incremental progress toward achieving our FY29 targets. I'll quickly highlight a few key takeaways. First, adjusted EPS grew 15% to $1.53, supported by robust 8% net revenue growth and solid underlying margin performance. Second, our backlog grew 21% to over $26 billion, setting a new record with our trailing 12-month book-to-bill rising to 1.4x. And third, we announced an agreement with the shareholders of PA Consulting to acquire the remaining stake in the company. We see PA's core competencies in digital consulting, innovation, and AI advisory as a force multiplier for Jacobs and a key accelerant in our strategy to redefine the asset lifecycle.
Bob Pragada: Good afternoon, everyone, and thank you for joining us to discuss our first quarter 2026 business performance. We delivered very strong results for Q1, exceeding our expectations across all key metrics and made incremental progress toward achieving our FY29 targets. I'll quickly highlight a few key takeaways. First, adjusted EPS grew 15% to $1.53, supported by robust 8% net revenue growth and solid underlying margin performance. Second, our backlog grew 21% to over $26 billion, setting a new record with our trailing 12-month book-to-bill rising to 1.4x. And third, we announced an agreement with the shareholders of PA Consulting to acquire the remaining stake in the company. We see PA's core competencies in digital consulting, innovation, and AI advisory as a force multiplier for Jacobs and a key accelerant in our strategy to redefine the asset lifecycle.
We delivered very strong results for q1 exceeding. Our expectations across all key metrics and made incremental progress toward achieving our FY, 29 targets,
I'll quickly highlight a few key takeaways first adjusted DPS, grew 15% to a $153 cents, supported by robust 8%, net revenue, growth and solid, underlying margin performance.
Second our backlog grew 21% to over 26 billion dollars setting a new record with our trailing 12-month book, to Bill rising to 1.4 times.
And third, we announced an agreement with the shareholders of PA Consulting to acquire the remaining stake in the company.
We see pause core competencies in digital Consulting. Innovation and AI advisory as a force multiplier for Jacobs and the key accelerant in our strategy to redefine the asset life cycle,
Bob Pragada: In summary, we are exiting Q1 with momentum, and this strong start to the year gives us confidence to increase our FY26 outlook for net revenue, adjusted EPS, and free cash flow margin, which Venk will go through in detail shortly. Turning to slide 4, we provide a detailed overview of our quarterly results. We are very pleased with Q1 results as a strong operating performance paired with our lower share count drove the fourth straight quarter of double-digit growth in adjusted EPS. During Q1, we also reported a substantial increase in our quarterly book-to-bill to 2.0 times, positioning us well for the rest of FY26 and beyond. Turning to slide 5, I'd like to highlight a few notable INAF Project Awards for the first quarter. Q1 included several marquee wins that reflect the breadth of our capabilities and the strength of our demand across our end markets.
Bob Pragada: In summary, we are exiting Q1 with momentum, and this strong start to the year gives us confidence to increase our FY26 outlook for net revenue, adjusted EPS, and free cash flow margin, which Venk will go through in detail shortly. Turning to slide 4, we provide a detailed overview of our quarterly results. We are very pleased with Q1 results as a strong operating performance paired with our lower share count drove the fourth straight quarter of double-digit growth in adjusted EPS. During Q1, we also reported a substantial increase in our quarterly book-to-bill to 2.0 times, positioning us well for the rest of FY26 and beyond. Turning to slide 5, I'd like to highlight a few notable INAF Project Awards for the first quarter. Q1 included several marquee wins that reflect the breadth of our capabilities and the strength of our demand across our end markets.
In summary, we are exiting q1 with momentum and the strong start, to the year gives us confidence to increase our FY. 26 outlook for net revenue, adjusted EPs and free cash flow margins, which bank will go through in detail, shortly.
Bob Pragada: dollars, setting a new record, with our trailing twelve-month book-to-bill rising to 1.4 times. And third, we announced an agreement with the shareholders of PA Consulting to acquire the remaining stake in the company. We see PA's core competencies in digital consulting, innovation, and AI Advisory as a force multiplier for Jacobs and a key accelerant in our strategy to redefine the asset lifecycle. In summary, we are exiting Q1 with momentum, and this strong start to the year gives us confidence to increase our FY 2026 outlook for net revenue, adjusted EPS, and free cash flow margin, which Venk will go through in detail shortly. Turning to slide 4, we provide a detailed overview of our quarterly results. We are very pleased with Q1 results as a strong operating performance, paired with our lower share count, drove the fourth straight quarter of double-digit growth in adjusted EPS.
Bob Pragada: dollars, setting a new record, with our trailing twelve-month book-to-bill rising to 1.4 times. And third, we announced an agreement with the shareholders of PA Consulting to acquire the remaining stake in the company. We see PA's core competencies in digital consulting, innovation, and AI Advisory as a force multiplier for Jacobs and a key accelerant in our strategy to redefine the asset lifecycle. In summary, we are exiting Q1 with momentum, and this strong start to the year gives us confidence to increase our FY 2026 outlook for net revenue, adjusted EPS, and free cash flow margin, which Venk will go through in detail shortly. Turning to slide 4, we provide a detailed overview of our quarterly results. We are very pleased with Q1 results as a strong operating performance, paired with our lower share count, drove the fourth straight quarter of double-digit growth in adjusted EPS.
Speaker #1: Dollars, adding a new record, with our trailing 12-month book-to-bill rising to 1.4 times. And third, we announced an agreement with the shareholders' remaining stake in the company.
Turning to slide 4. We provide a detailed overview of our quarterly results.
Speaker #1: of PA Consulting to acquire the We see PA's core competencies in digital consulting, innovation, and AI advisory as a force multiplier for JACOBS and a key accelerant in our strategy to redefine the asset lifecycle.
We are very pleased with q1 results as a strong operating performance paired with our lower share, count drove the 4th straight quarter of double digit, growth and adjusted eps.
Speaker #1: In summary, we are exiting Q1 with momentum, and the strong start to the year gives us confidence to increase our FY26 outlook for net revenue, adjusted EPS, and free cash flow margin, which Fink will go through in detail shortly.
During q1. We also reported a substantial increase in our quarterly book to Bill to 2.0 times, positioning us, well for the rest of FY, 26 and Beyond.
During the slide 5, I'd like to highlight a few notable inaf project awards for the first quarter.
q1 included, several Marquee wins that reflect the breadth of our capabilities and the strength of our demand of demand across our end markets
Speaker #1: Turning to slide four, we provide a detailed overview of our quarterly results. We are very pleased with Q1 results, as a strong operating performance paired with our lower share count drove the fourth straight quarter of double-digit growth in adjusted EPS.
Starting with water and environmental. We were selected to lead the engineering design for the Bolivar roads Gate Systems along the Texas Gulf Coast.
Bob Pragada: Starting with water and environmental, we were selected to lead the engineering design for the Bolivar Roads Gate System along the Texas Gulf Coast. Spanning the narrow strait connecting the Gulf to Galveston Bay, this project is expected to be among the largest storm surge barriers in the world. Once completed, it will help protect more than 6 million people while safeguarding businesses and maintaining operations along the Houston Ship Channel, a critical energy corridor. This major program underscores our leadership in delivering complex and high-impact water infrastructure focused on long-term resilience. In life sciences and advanced manufacturing, we were selected to provide engineering, procurement, and program management services for Hut 8 Riverbend Data Center in Louisiana, a flagship AI and high-performance computing project. The facility is poised to be one of the largest of its kind in North America.
Bob Pragada: Starting with water and environmental, we were selected to lead the engineering design for the Bolivar Roads Gate System along the Texas Gulf Coast. Spanning the narrow strait connecting the Gulf to Galveston Bay, this project is expected to be among the largest storm surge barriers in the world. Once completed, it will help protect more than 6 million people while safeguarding businesses and maintaining operations along the Houston Ship Channel, a critical energy corridor. This major program underscores our leadership in delivering complex and high-impact water infrastructure focused on long-term resilience. In life sciences and advanced manufacturing, we were selected to provide engineering, procurement, and program management services for Hut 8 Riverbend Data Center in Louisiana, a flagship AI and high-performance computing project. The facility is poised to be one of the largest of its kind in North America.
Speaker #1: During Q1, we also reported a substantial increase in our quarterly book-to-bill to 2.0 times, positioning us well for the rest of FY26 and beyond.
Bob Pragada: During Q1, we also reported a substantial increase in our quarterly book-to-bill to 2.0 times, positioning us well for the rest of FY 2026 and beyond. Turning to slide 5, I'd like to highlight a few notable INAF project awards for the first quarter. Q1 included several marquee wins that reflect the breadth of our capabilities and the strength of our demand across our end markets. Starting with water and environmental, we were selected to lead the engineering design for the Bolivar Roads Gate System along the Texas Gulf Coast. Spanning the narrow strait connecting the Gulf to Galveston Bay, this project is expected to be among the largest storm surge barriers in the world. Once completed, it will help protect more than 6 million people, while safeguarding businesses and maintaining operations along the Houston Ship Channel, a critical energy corridor.
Bob Pragada: During Q1, we also reported a substantial increase in our quarterly book-to-bill to 2.0 times, positioning us well for the rest of FY 2026 and beyond. Turning to slide 5, I'd like to highlight a few notable INAF project awards for the first quarter. Q1 included several marquee wins that reflect the breadth of our capabilities and the strength of our demand across our end markets. Starting with water and environmental, we were selected to lead the engineering design for the Bolivar Roads Gate System along the Texas Gulf Coast. Spanning the narrow strait connecting the Gulf to Galveston Bay, this project is expected to be among the largest storm surge barriers in the world. Once completed, it will help protect more than 6 million people, while safeguarding businesses and maintaining operations along the Houston Ship Channel, a critical energy corridor.
Planning the narrow straight, connecting the gulf to Galveston Bay. This project is expected to be among the largest storm surge barriers in the world.
Speaker #1: Turning to slide five, I'd like to highlight a few notable INAF project awards for the first quarter. Q1 included several marquee wins that reflect the breadth of our capabilities and the strength of our demand across our end markets.
once completed it will help protect more than 6 million people while safeguarding businesses and maintaining operations along the Houston chip Channel, a critical Energy Corridor
This major program underscores our leadership in delivering complex and high impact water infrastructure focused on long-term resilience.
Speaker #1: Starting with water and environmental engineering design for the Boulevard on the Texas Gulf Coast. Spanning the narrow strait connecting the Gulf to Galveston Bay, this project is expected to be among the largest storm surge barriers in the world.
In life science is an advanced manufacturing. We were selected to provide engineering procurement and program management services for Hut. 8 Riverbend data center in Louisiana.
A flagship AI high-performance and high performance Computing project.
The facility is poised to be 1 of the largest of its kind in North America.
Speaker #1: More than 6 million people—once completed, it will help protect more, while safeguarding businesses and maintaining operations along the Houston Ship Channel, a critical energy corridor.
The Region's power dense, utility infrastructure, enables, the speed reliability and flexibility required for Next Generation, AI workloads.
Bob Pragada: The region's power-dense utility infrastructure enables the speed, reliability, and flexibility required for next-generation AI workloads. This project demonstrates how we're leveraging our deep domain expertise in data centers, power, water, and digital twin technology to deliver increasingly complex facilities. In critical infrastructure, we continue to secure high-value, mission-critical programs that underscore the strength of our combined Jacobs and PA Consulting capabilities. Notably, in the UK, the UK Health Security Agency selected PA, supported by Jacobs, to act as delivery partner in its TRUST Program, an initiative focused on strengthening resilience and safeguarding critical health data and infrastructure. Through advisory, technical, and delivery support, we'll help the agency meet data security and cyber requirements, ensuring the systems that underpin public health and emergency response remain resilient and secure.
Bob Pragada: The region's power-dense utility infrastructure enables the speed, reliability, and flexibility required for next-generation AI workloads. This project demonstrates how we're leveraging our deep domain expertise in data centers, power, water, and digital twin technology to deliver increasingly complex facilities. In critical infrastructure, we continue to secure high-value, mission-critical programs that underscore the strength of our combined Jacobs and PA Consulting capabilities. Notably, in the UK, the UK Health Security Agency selected PA, supported by Jacobs, to act as delivery partner in its TRUST Program, an initiative focused on strengthening resilience and safeguarding critical health data and infrastructure. Through advisory, technical, and delivery support, we'll help the agency meet data security and cyber requirements, ensuring the systems that underpin public health and emergency response remain resilient and secure.
Speaker #1: This major program underscores our leadership in delivering complex and high-impact water infrastructure focused on long-term resilience. In life sciences and advanced manufacturing, we were selected to provide engineering, procurement, and program management services for HUD-8 Riverbend Data Center in Louisiana.
Bob Pragada: This major program underscores our leadership in delivering complex and high-impact water infrastructure focused on long-term resilience. In life sciences and advanced manufacturing, we were selected to provide engineering, procurement, and program management services for Hut 8's River Bend Data Center in Louisiana, a flagship AI high-performance computing project. The facility is poised to be one of the largest of its kind in North America. The region's power-dense utility infrastructure enables the speed, reliability, and flexibility required for next-generation AI workloads. This project demonstrates how we're leveraging our deep domain expertise in data centers, power, water, and digital twin technology to deliver increasingly complex facilities. In critical infrastructure, we continue to secure high-value, mission-critical programs that underscore the strength of our combined Jacobs and PA Consulting capabilities.
Bob Pragada: This major program underscores our leadership in delivering complex and high-impact water infrastructure focused on long-term resilience. In life sciences and advanced manufacturing, we were selected to provide engineering, procurement, and program management services for Hut 8's River Bend Data Center in Louisiana, a flagship AI high-performance computing project. The facility is poised to be one of the largest of its kind in North America. The region's power-dense utility infrastructure enables the speed, reliability, and flexibility required for next-generation AI workloads. This project demonstrates how we're leveraging our deep domain expertise in data centers, power, water, and digital twin technology to deliver increasingly complex facilities. In critical infrastructure, we continue to secure high-value, mission-critical programs that underscore the strength of our combined Jacobs and PA Consulting capabilities.
Ever increasingly complex facilities.
In critical infrastructure, we continue to secure high-value Mission critical programs that underscore the strength of our combined Jacobs and Pa Consulting capabilities.
Speaker #1: A flagship AI and high-performance computing project, the facility is poised to be one of the largest of its kind in North America. The region's power-dense utility infrastructure enables the speed, reliability, and flexibility required for next-generation AI workloads.
Notably in the UK, the health Security Agency selected PA supported by Jacobs to act as delivery partner in its trust program.
An initiative focused on strengthening resilience and safeguarding critical Health Data and infrastructure.
Speaker #1: This project demonstrates how we're leveraging our deep domain expertise in data centers, power, water, and digital twin technology to deliver increasingly complex facilities. In critical infrastructure, we continue to secure high-value, mission-critical programs that underscore the strength of our combined Jacobs and PA Consulting capabilities.
Through advisory Technical and delivery support will help the agency meet data, security, and cyber requirements. Ensuring the systems, that underpin Public Health, and emergency response, remain, resilient and secure.
This award reflects the growing demand for our integrated Consulting and delivery approach, and reinforces our role in supporting some of the UK government's, most critical priorities.
Bob Pragada: This award reflects the growing demand for our integrated consulting and delivery approach and reinforces our role in supporting some of the UK government's most critical priorities. Also within critical infrastructure, we were selected to lead program and construction management services for the $1.6 billion modernization of Cleveland Hopkins International Airport. The program will modernize aging infrastructure and improve accessibility and passenger flow at Ohio's busiest airport. Jacobs is ranked as Engineering News-Record's number one firm in aviation, a sector where we continue to see significant growth in demand for terminal upgrades, master planning for new builds, digital implementation, and AI advisory. In summary, we are deepening our relationship with key clients, which is driving multifaceted, multi-year program wins as demonstrated by our significant backlog growth in the quarter. Now I'll turn the call over to Venk to review our financial results in further detail.
Bob Pragada: This award reflects the growing demand for our integrated consulting and delivery approach and reinforces our role in supporting some of the UK government's most critical priorities. Also within critical infrastructure, we were selected to lead program and construction management services for the $1.6 billion modernization of Cleveland Hopkins International Airport. The program will modernize aging infrastructure and improve accessibility and passenger flow at Ohio's busiest airport. Jacobs is ranked as Engineering News-Record's number one firm in aviation, a sector where we continue to see significant growth in demand for terminal upgrades, master planning for new builds, digital implementation, and AI advisory. In summary, we are deepening our relationship with key clients, which is driving multifaceted, multi-year program wins as demonstrated by our significant backlog growth in the quarter. Now I'll turn the call over to Venk to review our financial results in further detail.
Speaker #1: Notably, in the UK, the Health Security Agency selected PA, supported by Jacobs, to act as delivery partner in its trust program, an initiative focused on strengthening resilience and safeguarding infrastructure.
Bob Pragada: Notably, in the UK, the UK Health Security Agency selected PA, supported by Jacobs, to act as delivery partner in its Trust program, an initiative focused on strengthening resilience and safeguarding critical health data and infrastructure. Through advisory, technical, and delivery support, we'll help the agency meet data security and cyber requirements, ensuring the systems that underpin public health and emergency response remain resilient and secure. This award reflects the growing demand for our integrated consulting and delivery approach and reinforces our role in supporting some of the UK government's most critical priorities. Also, within critical infrastructure, we were selected to lead program and construction management services for the $1.6 billion modernization of Cleveland Hopkins International Airport. The program will modernize aging infrastructure and improve accessibility and passenger flow at Ohio's busiest airport.
Bob Pragada: Notably, in the UK, the UK Health Security Agency selected PA, supported by Jacobs, to act as delivery partner in its Trust program, an initiative focused on strengthening resilience and safeguarding critical health data and infrastructure. Through advisory, technical, and delivery support, we'll help the agency meet data security and cyber requirements, ensuring the systems that underpin public health and emergency response remain resilient and secure. This award reflects the growing demand for our integrated consulting and delivery approach and reinforces our role in supporting some of the UK government's most critical priorities. Also, within critical infrastructure, we were selected to lead program and construction management services for the $1.6 billion modernization of Cleveland Hopkins International Airport. The program will modernize aging infrastructure and improve accessibility and passenger flow at Ohio's busiest airport.
Also within critical infrastructure. We are selected to lead program and construction management services for the 1.6 billion modernization of Cleveland Hopkins International Airport.
Speaker #1: Through advisory, technical, and delivery support, we'll help the agency meet data security and cyber requirements, ensuring the systems that underpin public health and emergency response remain resilient and secure.
The program will modernize aging infrastructure and improve accessibility and passenger flow at Ohio's, busiest airport.
Speaker #1: This award reflects the growing demand for our integrated consulting and delivery approach and reinforces our role in supporting some of the UK government's most critical priorities.
Jacobs is ranked as engineering news. Records number 1, firm in. Aviation a sector where we continue to see significant growth in demand for terminal upgrades, Master planning for new builds. Digital implementation and AI, advisors
Speaker #1: Also within critical infrastructure, we were selected to lead program and construction management services for the $1.6 billion modernization of Cleveland Hopkins International Airport. The program will modernize aging infrastructure and improve accessibility and passenger flow at Ohio's busiest airport.
In summary, we are deepening. Our relationship with key clients which is driving multifaceted multi-year, program wins as demonstrated by our significant backlog growth in the quarter,
Now, turn the call over to vent to review our financial results and further details.
Thank you, Bob and good afternoon everyone.
I'd like to Echo Bob's earlier comments on our announcements to acquire the remaining stake in PA Consulting.
Venk Nathamuni: Thank you, Bob, and good afternoon, everyone. I'd like to echo Bob's earlier comments on our announcement to acquire the remaining stake in PA Consulting. Our partnership over the last 5 years has truly differentiated our approach to our clients' business, and we look forward to accelerating the integration of our combined offering. A year ago at our Investor Day, we talked about the power of focus, and increasing our ownership in PA Consulting to 100% will support our goal to simplify our structure, execute on our strategy, and produce predictable, high-quality earnings over the long term. Now please turn to slide number 6, where I'll walk through our results for Q1. In the first quarter, gross revenue increased 12% year-over-year, and adjusted net revenue, which excludes pass-through revenue, grew by more than 8%.
Venk Nathamuni: Thank you, Bob, and good afternoon, everyone. I'd like to echo Bob's earlier comments on our announcement to acquire the remaining stake in PA Consulting. Our partnership over the last 5 years has truly differentiated our approach to our clients' business, and we look forward to accelerating the integration of our combined offering. A year ago at our Investor Day, we talked about the power of focus, and increasing our ownership in PA Consulting to 100% will support our goal to simplify our structure, execute on our strategy, and produce predictable, high-quality earnings over the long term. Now please turn to slide number 6, where I'll walk through our results for Q1. In the first quarter, gross revenue increased 12% year-over-year, and adjusted net revenue, which excludes pass-through revenue, grew by more than 8%.
Speaker #1: Jacobs is ranked as Engineering News-Record's number one firm in aviation, a sector where we continue to see significant growth in demand for terminal upgrades, master planning for new builds, digital implementation, and AI advisory.
Bob Pragada: Jacobs is ranked as Engineering News-Record's number 1 firm in aviation, a sector where we continue to see significant growth in demand for terminal upgrades, master planning for new builds, digital implementation, and AI Advisory. In summary, we are deepening our relationship with key clients, which is driving multifaceted, multiyear program wins, as demonstrated by our significant backlog growth in the quarter. Now I'll turn the call over to Venk to review our financial results in further detail.
Bob Pragada: Jacobs is ranked as Engineering News-Record's number 1 firm in aviation, a sector where we continue to see significant growth in demand for terminal upgrades, master planning for new builds, digital implementation, and AI Advisory. In summary, we are deepening our relationship with key clients, which is driving multifaceted, multiyear program wins, as demonstrated by our significant backlog growth in the quarter. Now I'll turn the call over to Venk to review our financial results in further detail.
Our partnership. Over the last 5 years, has truly differentiated our approach to our client's business and we look forward to accelerating the integration of our combined offering.
Speaker #1: In summary, we are deepening our relationship with key clients, which is driving multifaceted, multi-year program wins, as demonstrated by our significant backlog growth in the quarter.
A year ago at our investor day. We talked about the power of focus and increasing our ownership in PA Consulting to 100% to support our goal to simplify our structure. Execute on our strategy and produce predictable high-quality earnings over the long term.
Speaker #1: Now I'll turn the call over to Venk to review our financial results in further detail.
Now, please turn to slide number 6, where I'll walk through our results for q1.
Speaker #2: Thank you, Bob, and good afternoon, everyone. I'd like to echo Bob's earlier comments on our announcement to acquire the remaining stake in PA Consulting.
Venkatesh Nathamuni: Thank you, Bob, and good afternoon, everyone. I'd like to echo Bob's earlier comments on our announcement to acquire the remaining stake in PA Consulting. Our partnership over the last five years has truly differentiated our approach to our clients' business, and we look forward to accelerating the integration of our combined offering. A year ago, at our Investor Day, we talked about the power of focus, and increasing our ownership in PA Consulting to 100% will support our goal to simplify our structure, execute on our strategy, and produce predictable, high-quality earnings over the long term. Now, please turn to slide number 6, where I'll walk through our results for Q1. In the first quarter, gross revenue increased 12% year-over-year, and Adjusted Net Revenue, which excludes Pass-Through Revenue, grew by more than 8%.
Venkatesh Nathamuni: Thank you, Bob, and good afternoon, everyone. I'd like to echo Bob's earlier comments on our announcement to acquire the remaining stake in PA Consulting. Our partnership over the last five years has truly differentiated our approach to our clients' business, and we look forward to accelerating the integration of our combined offering. A year ago, at our Investor Day, we talked about the power of focus, and increasing our ownership in PA Consulting to 100% will support our goal to simplify our structure, execute on our strategy, and produce predictable, high-quality earnings over the long term. Now, please turn to slide number 6, where I'll walk through our results for Q1. In the first quarter, gross revenue increased 12% year-over-year, and Adjusted Net Revenue, which excludes Pass-Through Revenue, grew by more than 8%.
In the first quarter, gross revenue, increased 12% year-over-year.
Speaker #2: Our partnership over the last five years has truly differentiated our approach to our clients' business, and we look forward to accelerating the integration of our combined offering.
And adjusted net revenue, which excludes passed through Revenue, grew by more than 8%.
Q1. Adjusted ibida was 303 million.
Growing more than 7%.
Speaker #2: A year ago, at our investor day, we talked about the power of focus, and increasing our ownership in PA Consulting to 100% will support our goal to simplify our structure, execute on our strategy, and produce predictable, high-quality earnings over the long term.
with our margin coming in about, 13.4%
Venk Nathamuni: Q1 adjusted EBITDA was $303 million, growing more than 7%, with our margin coming in about 13.4%. Recall that last year during Q1, we absorbed less PTO than anticipated, resulting in a margin tailwind that did not recur this year. Overall, adjusted EPS rose 15% year over year, a great start to fiscal year 2026. Consolidated backlog was up 21% year over year to a record $26.3 billion, with our trailing 12-month book-to-bill rising to 1.4x. Book-to-bill was particularly strong in Q1, driven in part by several large awards in the life sciences and advanced manufacturing end market. We expect these awards to contribute positively to net revenue growth through fiscal year 2026 and beyond, but do note that they carry higher-than-normal pass-through revenue.
Venk Nathamuni: Q1 adjusted EBITDA was $303 million, growing more than 7%, with our margin coming in about 13.4%. Recall that last year during Q1, we absorbed less PTO than anticipated, resulting in a margin tailwind that did not recur this year. Overall, adjusted EPS rose 15% year over year, a great start to fiscal year 2026. Consolidated backlog was up 21% year over year to a record $26.3 billion, with our trailing 12-month book-to-bill rising to 1.4x. Book-to-bill was particularly strong in Q1, driven in part by several large awards in the life sciences and advanced manufacturing end market. We expect these awards to contribute positively to net revenue growth through fiscal year 2026 and beyond, but do note that they carry higher-than-normal pass-through revenue.
Recall that last year during q1, we absorbed less PTO than anticipated.
Resulting in a margin Tailwind. That did not recover this year.
Speaker #2: Now, please turn to slide number six where I'll walk through our results for Q1. In the first quarter, gross revenue increased 12% year over year, and adjusted net revenue, which excludes pass-through revenue, grew by more than 8%.
Overall adjusted EPS Rose, 15% year-over-year, a great start to fiscal year 26.
Consolidated backlog was up 21%. Year-over-year to a record, 26.3 billion.
Speaker #2: Q1 adjusted EBITDA was $303 million, growing more than 7%, with our margin coming in at about 13.4%. Recall that last year during Q1, we absorbed less PTO than anticipated, resulting in a margin tailwind that did not recur this year.
Venkatesh Nathamuni: Q1 adjusted EBITDA was $303 million, growing more than 7%, with our margin coming in about 13.4%. Recall that last year, during Q1, we absorbed less PTO than anticipated, resulting in a margin tailwind that did not recur this year. Overall, adjusted EPS rose 15% year over year, a great start to fiscal year 2026.... Consolidated backlog was up 21% year-over-year to a record $26.3 billion, with our trailing twelve-month book-to-bill rising to 1.4 times. Book-to-bill was particularly strong in Q1, driven in part by several large awards in the life sciences and advanced manufacturing end market. We expect these awards to contribute positively to net revenue growth through fiscal year 2026 and beyond, but do note that they carry higher than normal pass-through revenue.
Venkatesh Nathamuni: Q1 adjusted EBITDA was $303 million, growing more than 7%, with our margin coming in about 13.4%. Recall that last year, during Q1, we absorbed less PTO than anticipated, resulting in a margin tailwind that did not recur this year. Overall, adjusted EPS rose 15% year over year, a great start to fiscal year 2026.... Consolidated backlog was up 21% year-over-year to a record $26.3 billion, with our trailing twelve-month book-to-bill rising to 1.4 times. Book-to-bill was particularly strong in Q1, driven in part by several large awards in the life sciences and advanced manufacturing end market. We expect these awards to contribute positively to net revenue growth through fiscal year 2026 and beyond, but do note that they carry higher than normal pass-through revenue.
With our trading 12-month book to Bill rising to 1.4 times.
Book. The bill was particularly strong in q1.
Driven in part by several large Awards in the Life Sciences and advanced manufacturing and markets.
We expect these Awards to contribute positively to net revenue growth through fiscal year 26 and Beyond.
But do note that they carry higher than normal pass through Revenue.
Speaker #2: Overall, adjusted EPS rose 15% year over year, a great start to fiscal year '26. Consolidated backlog was up 21% year over year, to a record $26.3 billion.
Importantly, gross profit and backlog.
Which would not be impacted by the staff through Dynamics, increased 15% year-over-year during q1.
Venk Nathamuni: Importantly, gross profit and backlog, which would not be impacted by this pass-through dynamic, increased 15% year over year during Q1, highlighting the underlying strength of our sales performance. Regarding our performance by end market in infrastructure and advanced facilities, let's now turn to slide number 7. At a high level, all of our end markets performed well during the quarter, with strong revenue growth in life sciences, advanced manufacturing, and critical infrastructure within INAF, as well as PA Consulting. As a result, we finished above the high end of our Q1 forecast for enterprise net revenue growth. Focusing in on life sciences and advanced manufacturing, net revenue grew 10% in Q1, a nice improvement from Q4 as programs in our advanced manufacturing vertical ramp up.
Venk Nathamuni: Importantly, gross profit and backlog, which would not be impacted by this pass-through dynamic, increased 15% year over year during Q1, highlighting the underlying strength of our sales performance. Regarding our performance by end market in infrastructure and advanced facilities, let's now turn to slide number 7. At a high level, all of our end markets performed well during the quarter, with strong revenue growth in life sciences, advanced manufacturing, and critical infrastructure within INAF, as well as PA Consulting. As a result, we finished above the high end of our Q1 forecast for enterprise net revenue growth. Focusing in on life sciences and advanced manufacturing, net revenue grew 10% in Q1, a nice improvement from Q4 as programs in our advanced manufacturing vertical ramp up.
Highlighting the underlying strength of our sales performance.
Speaker #2: With our trailing 12-month book-to-bill rising to 1.4 times. Book-to-bill was particularly strong in Q1, driven in part by several large awards in the life sciences and advanced manufacturing end market.
Regarding our performance by End Market and infrastructure and advanced facilities. Let's now turn to slide number 7,
and a high level, all of our end markets performed. Well, during the quarter,
Speaker #2: We expect these awards to contribute positively to net revenue growth through fiscal year '26 and beyond. But do note that they carry higher-than-normal pass-through revenue.
With strong Revenue growth and life sciences and advanced manufacturing and critical infrastructure Within inaf.
as a result, we finished about the high end of our q1 forecast, for Enterprise net revenue growth,
Speaker #2: Importantly, gross profit and backlog, which would not be impacted by this pass-through dynamic, increased 15% year over year during Q1, highlighting the underlying strength of our sales performance.
Venkatesh Nathamuni: Importantly, gross profit in backlog, which would not be impacted by this pass-through dynamic, increased 15% year-over-year during Q1, highlighting the underlying strength of our sales performance. Regarding our performance by end market and infrastructure and advanced facilities, let's now turn to slide number 7. At a high level, all of our end markets performed well during the quarter, with strong revenue growth in life sciences, advanced manufacturing, and critical infrastructure within INAF, as well as PA Consulting. As a result, we finished above the high end of our Q1 forecast for enterprise net revenue growth. Focusing in on life sciences and advanced manufacturing, net revenue grew 10% in Q1, a nice improvement from Q4, as programs in our advanced manufacturing vertical ramp up.
Venkatesh Nathamuni: Importantly, gross profit in backlog, which would not be impacted by this pass-through dynamic, increased 15% year-over-year during Q1, highlighting the underlying strength of our sales performance. Regarding our performance by end market and infrastructure and advanced facilities, let's now turn to slide number 7. At a high level, all of our end markets performed well during the quarter, with strong revenue growth in life sciences, advanced manufacturing, and critical infrastructure within INAF, as well as PA Consulting. As a result, we finished above the high end of our Q1 forecast for enterprise net revenue growth. Focusing in on life sciences and advanced manufacturing, net revenue grew 10% in Q1, a nice improvement from Q4, as programs in our advanced manufacturing vertical ramp up.
Focusing in on life sciences and advanced Manufacturing.
Net revenue, grew 10% in q1. A nice improvement from Q4 as programs in our Advanced manufacturing vertical ramp up.
Speaker #2: Regarding our performance by end market and Infrastructure and Advanced Facilities, let's now turn to slide number seven. At a high level, all of our end markets performed well during the quarter, with strong revenue growth in Life Sciences and Advanced Manufacturing and Critical Infrastructure within INAF, as well as PA Consulting.
Drive higher growth.
Venk Nathamuni: As we have noted in past quarters, strong award activity in both the data center and semiconductor sectors is now helping drive higher growth. Additionally, we continue to see favorable trends in life sciences, and this combination positions us well for the remainder of the year. Our current expectation is that growth in this end market will lead INAF in fiscal year 2026 as programs ramp up during the second half of the year. Shifting now to critical infrastructure, net revenue increased 8% over Q1 2025. Critical infrastructure is performing well across the board with robust growth in transportation, particularly in rail and aviation, driving strong overall growth for the end market. Net revenue growth in our water and environmental end market increased sequentially to 4%, driven by high single-digit growth in water and a modest easing of headwinds in environmental.
Venk Nathamuni: As we have noted in past quarters, strong award activity in both the data center and semiconductor sectors is now helping drive higher growth. Additionally, we continue to see favorable trends in life sciences, and this combination positions us well for the remainder of the year. Our current expectation is that growth in this end market will lead INAF in fiscal year 2026 as programs ramp up during the second half of the year. Shifting now to critical infrastructure, net revenue increased 8% over Q1 2025. Critical infrastructure is performing well across the board with robust growth in transportation, particularly in rail and aviation, driving strong overall growth for the end market. Net revenue growth in our water and environmental end market increased sequentially to 4%, driven by high single-digit growth in water and a modest easing of headwinds in environmental.
Additionally, we continue to see favorable Trends in life sciences and this combination positions us. Well, for the remainder of the year,
Speaker #2: As a result, we finished above the high end of our Q1 forecast for enterprise net revenue growth. Focusing in on life sciences and advanced manufacturing, net revenue grew 10% in Q1, a nice improvement from Q4, as programs in our advanced manufacturing vertical ramp up.
Our current expectation, is that growth in this end Market will lead inaf in fiscal year 26 as programs ramp up during the second half of the year.
Shifting now to critical infrastructure, net revenue increased 8% over. Q1 2025.
Speaker #2: As we have noted in past quarters, strong award activity in both the data center and semiconductor sectors is now helping drive higher growth. Additionally, we continue to see favorable trends in life sciences, and this combination positions us well for the remainder of the year.
Venkatesh Nathamuni: As we have noted in past quarters, strong award activity in both the data center and semiconductor sectors is now helping drive higher growth. Additionally, we continue to see favorable trends in life sciences, and this combination positions us well for the remainder of the year. Our current expectation is that growth in this end market will lead INAF in fiscal year 2026 as programs ramp up during the second half of the year. Shifting now to critical infrastructure, net revenue increased 8% over Q1 2025. Critical infrastructure is performing well across the board, with robust growth in transportation, particularly in rail and aviation, driving strong overall growth for the end market. Net revenue growth in our water and environmental end market increased sequentially to 4%, driven by high single-digit growth in water and a modest easing of headwinds in environmental.
Venkatesh Nathamuni: As we have noted in past quarters, strong award activity in both the data center and semiconductor sectors is now helping drive higher growth. Additionally, we continue to see favorable trends in life sciences, and this combination positions us well for the remainder of the year. Our current expectation is that growth in this end market will lead INAF in fiscal year 2026 as programs ramp up during the second half of the year. Shifting now to critical infrastructure, net revenue increased 8% over Q1 2025. Critical infrastructure is performing well across the board, with robust growth in transportation, particularly in rail and aviation, driving strong overall growth for the end market. Net revenue growth in our water and environmental end market increased sequentially to 4%, driven by high single-digit growth in water and a modest easing of headwinds in environmental.
Critical infrastructure is performing. Well, of course, the boat with robust growth in transportation, particularly in Rail and Aviation
Driving strong overall growth for the End Market.
Net revenue growth in our water and environmental and Market increased sequentially to 4%.
Driven by high single-digit growth in water and a modest easing of headwinds in Environmental.
Speaker #2: Our current expectation is that growth in this end market will lead INAF in fiscal year '26, as programs ramp up during the second half of the year.
We forecast year-on-year, performance for environmental will improve as we move into the second half of the fiscal year.
Venk Nathamuni: We forecast year-over-year performance for environmental will improve as we move into the second half of the fiscal year. In summary, we performed well across our end markets during Q1, and we believe we are positioned nicely for the remainder of fiscal year 2026 and beyond. Now moving on to slide number 8, I'll provide a brief overview of our segment financials. In Q1, INAF operating profit increased modestly year-over-year with similar constant currency performance. PA Consulting operating profit increased 27% on 16% revenue growth and a strong operating margin of 24%. On a constant currency basis, operating profit grew 22%. PA continues to benefit from rising demand for digital consulting and advisory services in the public, national security, and energy sectors. As we look ahead, we expect PA's revenue growth to remain solid, with fiscal year 2026 tracking in the high single-digit range year-over-year.
Venk Nathamuni: We forecast year-over-year performance for environmental will improve as we move into the second half of the fiscal year. In summary, we performed well across our end markets during Q1, and we believe we are positioned nicely for the remainder of fiscal year 2026 and beyond. Now moving on to slide number 8, I'll provide a brief overview of our segment financials. In Q1, INAF operating profit increased modestly year-over-year with similar constant currency performance. PA Consulting operating profit increased 27% on 16% revenue growth and a strong operating margin of 24%. On a constant currency basis, operating profit grew 22%. PA continues to benefit from rising demand for digital consulting and advisory services in the public, national security, and energy sectors. As we look ahead, we expect PA's revenue growth to remain solid, with fiscal year 2026 tracking in the high single-digit range year-over-year.
Speaker #2: Shifting now to Critical Infrastructure, net revenue increased 8% over Q1 2025. Critical Infrastructure is performing well across the board, with robust growth in transportation—particularly in rail and aviation—driving strong overall growth for the end market.
In summary. We performed well across our end markets during q1, and we believe we're positioned nicely for the remainder of fiscal year. 26 and Beyond.
Now, moving on to slide number 8, I'll provide a brief overview of our segments financials.
In q1.
Inaf operating profit increased modestly year on year with similar constant currency performance.
Speaker #2: Net revenue growth in our water and environmental end market increased sequentially to 4%, driven by high single-digit growth in water and a modest easing of headwinds in environmental.
PA Consulting operating profit increased 27% on 16% Revenue growth and a strong operating margin of 24%.
Speaker #2: We forecast year-on-year performance for Environmental will improve as we move into the second half of the fiscal year. In summary, we performed well across our end markets during Q1, and we believe we are positioned nicely for the remainder of fiscal year '26 and beyond.
Venkatesh Nathamuni: We forecast year-on-year performance for Environmental will improve as we move into the second half of the fiscal year. In summary, we performed well across our end markets during Q1, and we believe we are positioned nicely for the remainder of fiscal year 2026 and beyond. Now, moving on to slide 8, I'll provide a brief overview of our segment financials. In Q1, INAF operating profit increased modestly year-on-year, with similar constant currency performance. PA Consulting operating profit increased 27% on 16% revenue growth and a strong operating margin of 24%. On a constant currency basis, operating profit grew 22%. PA continues to benefit from rising demand for digital consulting and advisory services in the public, national security, and energy sectors. As we look ahead, we expect PA's revenue growth to remain solid, with fiscal year 2026 tracking in the high single-digit range year-on-year.
Venkatesh Nathamuni: We forecast year-on-year performance for Environmental will improve as we move into the second half of the fiscal year. In summary, we performed well across our end markets during Q1, and we believe we are positioned nicely for the remainder of fiscal year 2026 and beyond. Now, moving on to slide 8, I'll provide a brief overview of our segment financials. In Q1, INAF operating profit increased modestly year-on-year, with similar constant currency performance. PA Consulting operating profit increased 27% on 16% revenue growth and a strong operating margin of 24%. On a constant currency basis, operating profit grew 22%. PA continues to benefit from rising demand for digital consulting and advisory services in the public, national security, and energy sectors. As we look ahead, we expect PA's revenue growth to remain solid, with fiscal year 2026 tracking in the high single-digit range year-on-year.
on a constant currency basis operating profit, grew 22%
PA continues to benefit from rising demand, for digital Consulting and advisory services in the public National Security and energy sectors.
Speaker #2: Now, moving on to slide number eight, I'll provide a brief overview of our segment financials. In Q1, INAF operating profit increased modestly year-on-year, with similar constant currency performance.
As we look ahead, we expect paas Revenue growth to remain solid with fiscal year 26, tracking in the high single digit range year on year.
Moving on to slide 9, we provide an overview of cash generation and our balance sheet.
Speaker #2: PA Consulting operating profit increased 27% on 16% revenue growth and a strong operating margin of 24%. On a constant currency basis, operating profit grew 22%.
Venk Nathamuni: Moving on to slide 9, we provide an overview of cash generation and our balance sheet. For Q1, free cash flow came in at $365 million, supported by solid working capital performance, as well as a favorable cash timing item at the end of the quarter that will reverse in Q2. Excluding this timing item, underlying free cash flow performance was still very strong and gives us confidence to raise our full-year free cash flow outlook, which I'll discuss shortly. Focusing in on capital returns, we increased our share repurchase quantum during Q1 to take advantage of the dislocation in our shares in the second half of the quarter. As a result, we're starting the year well on our way to returning at least 60% of our free cash flow to shareholders.
Venk Nathamuni: Moving on to slide 9, we provide an overview of cash generation and our balance sheet. For Q1, free cash flow came in at $365 million, supported by solid working capital performance, as well as a favorable cash timing item at the end of the quarter that will reverse in Q2. Excluding this timing item, underlying free cash flow performance was still very strong and gives us confidence to raise our full-year free cash flow outlook, which I'll discuss shortly. Focusing in on capital returns, we increased our share repurchase quantum during Q1 to take advantage of the dislocation in our shares in the second half of the quarter. As a result, we're starting the year well on our way to returning at least 60% of our free cash flow to shareholders.
For q1, free cash flow came in at 365 million supported by solid working Capital Performance.
As well as a favorable cache timing item, at the end of the quarter that will reverse in Q2.
Speaker #2: PA continues to benefit from rising demand for digital consulting and advisory services in the public, national security, and energy sectors. As we look ahead, we expect PA's revenue growth to remain solid, with fiscal year '26 tracking in the high single-digit range year-on-year.
Excluding this timing item underlying free cash flow performance was still very strong and gives us confidence to raise our full year. Free cash flow Outlook which I'll discuss shortly.
Focusing in on Capital returns. We increased our shared repurchase Quantum during q1 to take advantage of the dislocation in our shares in the second half of the quarter.
Speaker #2: Moving on to slide nine, we provide an overview of cash generation and our balance sheet. For Q1, free cash flow came in at $365 million, supported by solid working capital performance as well as a favorable cash timing item at the end of the quarter that will reverse in Q2.
Venkatesh Nathamuni: Moving on to slide 9, we provide an overview of cash generation and our balance sheet. For Q1, free cash flow came in at $365 million, supported by solid working capital performance, as well as a favorable cash timing item at the end of the quarter that will reverse in Q2. Excluding this timing item, underlying free cash flow performance was still very strong and gives us confidence to raise our full-year free cash flow outlook, which I'll discuss shortly. Focusing in on capital returns, we increased our share repurchase quantum during Q1 to take advantage of the dislocation in our shares in the second half of the quarter. As a result, we're starting the year well on our way to returning at least 60% of our free cash flow to shareholders.
Venkatesh Nathamuni: Moving on to slide 9, we provide an overview of cash generation and our balance sheet. For Q1, free cash flow came in at $365 million, supported by solid working capital performance, as well as a favorable cash timing item at the end of the quarter that will reverse in Q2. Excluding this timing item, underlying free cash flow performance was still very strong and gives us confidence to raise our full-year free cash flow outlook, which I'll discuss shortly. Focusing in on capital returns, we increased our share repurchase quantum during Q1 to take advantage of the dislocation in our shares in the second half of the quarter. As a result, we're starting the year well on our way to returning at least 60% of our free cash flow to shareholders.
As a result, we're starting the year well on our way to returning at least 60% of our free cash flow to shareholders.
Additionally, we announced last week that we will be raising our quarterly dividend from 32 cents to 36 Cents. A share a 12.5% increase.
Venk Nathamuni: Additionally, we announced last week that we will be raising our quarterly dividend from $0.32 to $0.36 a share, a 12.5% increase. We have now more than doubled our quarterly dividend per share since 2019. Additionally, our net leverage ratio currently stands just below 0.8 times on LTM adjusted EBITDA, which is well below our 1.0 to 1.5 times target range. Our balance sheet strength has enabled us to increase share repurchases, raise our quarterly dividend, and enter into an agreement to purchase the remaining stake in PA Consulting. The acquisition of the remaining stake in PA will raise our net leverage to slightly above the high end of our 1.0 to 1.5 times target range upon closing, but we expect to return to the target range within a year. Finally, please turn to slide number 10 for our updated fiscal year 2026 outlook.
Venk Nathamuni: Additionally, we announced last week that we will be raising our quarterly dividend from $0.32 to $0.36 a share, a 12.5% increase. We have now more than doubled our quarterly dividend per share since 2019. Additionally, our net leverage ratio currently stands just below 0.8 times on LTM adjusted EBITDA, which is well below our 1.0 to 1.5 times target range. Our balance sheet strength has enabled us to increase share repurchases, raise our quarterly dividend, and enter into an agreement to purchase the remaining stake in PA Consulting. The acquisition of the remaining stake in PA will raise our net leverage to slightly above the high end of our 1.0 to 1.5 times target range upon closing, but we expect to return to the target range within a year. Finally, please turn to slide number 10 for our updated fiscal year 2026 outlook.
Speaker #2: Excluding this timing item, underlying free cash flow performance was still very strong and gives us confidence to raise our full-year free cash flow outlook, which I'll discuss shortly.
We have now more than doubled, our quarterly dividend per share since 2019.
Speaker #2: Focusing in on capital returns, we increased our share repurchase quantum during Q1 to take advantage of the dislocation in our shares in the second half of the quarter.
Additionally, our net leverage ratio currently stands just below 0.8 times on LTM, adjusted ibida, which is well below our 1.0 to 1.5 times target range.
Our balance sheet strength has enabled us to increase, share repurchases.
Speaker #2: As a result, we're starting the year well on our way to returning at least 60% of our free cash flow to shareholders. Additionally, we announced last week that we will be raising our quarterly dividend from $32 to $36 a share, a 12.5% increase.
Raise our quarterly dividend and enter into an agreement to purchase the remaining stake in PA Consulting.
Venkatesh Nathamuni: Additionally, we announced last week that we will be raising our quarterly dividend from $0.32 to $0.36 a share, a 12.5% increase. We have now more than doubled our quarterly dividend per share since 2019. Additionally, our net leverage ratio currently stands just below 0.8 times on LTM adjusted EBITDA, which is well below our 1.0 to 1.5 times target range. Our balance sheet strength has enabled us to increase share repurchases, raise our quarterly dividend, and enter into an agreement to purchase the remaining stake in PA Consulting. The acquisition of the remaining stake in PA will raise our net leverage to slightly above the high end of our 1.0 to 1.5 times target range upon closing, but we expect to return to the target range within a year.
Venkatesh Nathamuni: Additionally, we announced last week that we will be raising our quarterly dividend from $0.32 to $0.36 a share, a 12.5% increase. We have now more than doubled our quarterly dividend per share since 2019. Additionally, our net leverage ratio currently stands just below 0.8 times on LTM adjusted EBITDA, which is well below our 1.0 to 1.5 times target range. Our balance sheet strength has enabled us to increase share repurchases, raise our quarterly dividend, and enter into an agreement to purchase the remaining stake in PA Consulting. The acquisition of the remaining stake in PA will raise our net leverage to slightly above the high end of our 1.0 to 1.5 times target range upon closing, but we expect to return to the target range within a year.
The acquisition of the remaining stake in PA will raise our net leverage to slightly about the high end of our 1.0 to 1.5 times, target range, upon closing.
But we expect to return to the target range within a year.
Speaker #2: We have now more than doubled our quarterly dividend per share since 2019. Additionally, our net leverage ratio currently stands just below 0.8 times on LTM-adjusted EBITDA, which is well below our 1.0 to 1.5 times target range.
Finally, please turn to slide number 10 for our updated fiscal year. 26 Outlook.
We had increasing our forecast for adjusted net, revenue growth.
Adjusted EPS growth.
And free cash flow margin relative to our guidance from last quarter.
Venk Nathamuni: We're increasing our forecast for adjusted net revenue growth, adjusted EPS growth, and free cash flow margin relative to our guidance from last quarter. We're increasing our fiscal year 2026 net revenue range to 6.5% to 10% year-over-year, adjusted EPS range to $6.95 to $7.30, and free cash flow margin range to 7% to 8.5%. Our expectation remains unchanged for an Adjusted EBITDA margin range of 14.4% to 14.7%. Notably, our outlook for fiscal year 2026 implies over 16% year-over-year growth in adjusted EPS at the midpoint. We provide relevant assumptions on the right side of the page to help with your modeling. Please note that our guidance does not reflect the announced acquisition of the remaining stake in PA Consulting, and we plan to update our outlook once a deal closes, likely with our Q2 results in May.
Venk Nathamuni: We're increasing our forecast for adjusted net revenue growth, adjusted EPS growth, and free cash flow margin relative to our guidance from last quarter. We're increasing our fiscal year 2026 net revenue range to 6.5% to 10% year-over-year, adjusted EPS range to $6.95 to $7.30, and free cash flow margin range to 7% to 8.5%. Our expectation remains unchanged for an Adjusted EBITDA margin range of 14.4% to 14.7%. Notably, our outlook for fiscal year 2026 implies over 16% year-over-year growth in adjusted EPS at the midpoint. We provide relevant assumptions on the right side of the page to help with your modeling. Please note that our guidance does not reflect the announced acquisition of the remaining stake in PA Consulting, and we plan to update our outlook once a deal closes, likely with our Q2 results in May.
Speaker #2: Our balance sheet strength has enabled us to increase share repurchases, raise our quarterly dividend, and enter into an agreement to purchase the remaining stake in PA Consulting.
With increasing our fiscal year 26, net revenue range to 6.5% to 10% year-over-year.
Speaker #2: The acquisition of the remaining stake in PA will raise our net leverage to slightly above the high end of our 1.0 to 1.5 times target range upon closing, but we expect to return to the target range within a year.
Is range to 6.95 to 7.30.
And free cash flow margin range to 7% to 8.5%.
Speaker #2: Finally, please turn to slide number 10 for our updated fiscal year '26 outlook. We're increasing our forecast for adjusted net revenue growth, adjusted EPS growth, and free cash flow margin relative to our guidance from last quarter.
Venkatesh Nathamuni: Finally, please turn to slide 10 for our updated fiscal year 2026 outlook. We're increasing our forecast for adjusted net revenue growth, adjusted EPS growth, and free cash flow margin relative to our guidance from last quarter. We're increasing our fiscal year 2026 net revenue range to 6.5% to 10% year-over-year, adjusted EPS range to $6.95 to $7.30, and free cash flow margin range to 7% to 8.5%.... Our expectation remains unchanged for an adjusted EBITDA margin range of 14.4% to 14.7%. Notably, our outlook for fiscal year 2026 implies over 16% year-on-year growth in adjusted EPS at the midpoint. We provide relevant assumptions on the right side of the page to help with your modeling.
Venkatesh Nathamuni: Finally, please turn to slide 10 for our updated fiscal year 2026 outlook. We're increasing our forecast for adjusted net revenue growth, adjusted EPS growth, and free cash flow margin relative to our guidance from last quarter. We're increasing our fiscal year 2026 net revenue range to 6.5% to 10% year-over-year, adjusted EPS range to $6.95 to $7.30, and free cash flow margin range to 7% to 8.5%.... Our expectation remains unchanged for an adjusted EBITDA margin range of 14.4% to 14.7%. Notably, our outlook for fiscal year 2026 implies over 16% year-on-year growth in adjusted EPS at the midpoint. We provide relevant assumptions on the right side of the page to help with your modeling.
Our expectation remains unchanged for an adjusted, Eva margin range of 14.4% to 14.7%.
Notably our outlook for fiscal year 26 implies over 16% year-on-year growth in adjusted EPS at the midpoint.
We provide relevant assumptions on the right side of the page to help with your modeling.
Speaker #2: We're increasing our fiscal year '26 net revenue range to 6.5% to 10% year-over-year, adjusted EPS range to $6.95 to $7.30, and free cash flow margin range to 7% to 8.5%.
Please note that our guidance does not reflect the announced acquisition of the remaining stake in PA Consulting.
With our Q2 results in May.
Based on current assumptions. We expect the acquisition to be accredited to adjusted EPS in the first 12 months following closing.
Speaker #2: Our expectation remains unchanged for an adjusted EBITDA margin range of 14.4% to 14.7%. Notably, our outlook for fiscal year '26 implies over 16% year-on-year growth in adjusted EPS at the midpoint.
Venk Nathamuni: Based on current assumptions, we expect the acquisition to be accretive to adjusted EPS in the first 12 months following closing. We anticipate the $16 million to $20 million in projected cost synergies will begin to face in during fiscal year 2026, with revenue synergies providing incremental upside. As it pertains to Q2, we expect our adjusted EBITDA margin to be in the range of 13.8% to 14%, with year-over-year net revenue growth of approximately 6.5%. In summary, we're off to a great start in fiscal year 2026 and remain focused on strong execution, profitable growth, and continued capital returns. With that, I'll turn the call back over to Bob.
Venk Nathamuni: Based on current assumptions, we expect the acquisition to be accretive to adjusted EPS in the first 12 months following closing. We anticipate the $16 million to $20 million in projected cost synergies will begin to face in during fiscal year 2026, with revenue synergies providing incremental upside. As it pertains to Q2, we expect our adjusted EBITDA margin to be in the range of 13.8% to 14%, with year-over-year net revenue growth of approximately 6.5%. In summary, we're off to a great start in fiscal year 2026 and remain focused on strong execution, profitable growth, and continued capital returns. With that, I'll turn the call back over to Bob.
We anticipate the 16 million to 20 million. In projected cost synergies will begin to face in during fiscal year 26.
With Revenue synergies, providing incremental upside.
Speaker #2: We provide relevant assumptions on the right side of the page to help with your modeling. Please note that our guidance does not reflect the announced acquisition of the remaining stake in PA Consulting, and we plan to update our outlook once the deal closes, likely with our Q2 results in May.
As it pertains to Q2. We expect our adjusted ebitda margin to be in the range of 13.8% to 14%.
Venkatesh Nathamuni: Please note that our guidance does not reflect the announced acquisition of the remaining stake in PA Consulting, and we plan to update our outlook once the deal closes, likely with our Q2 results in May. Based on current assumptions, we expect the acquisition to be accretive to Adjusted EPS in the first 12 months following closing. We anticipate the $16 million to $20 million in projected cost synergies will begin to phase in during fiscal year 2026, with revenue synergies providing incremental upside. As it pertains to Q2, we expect our Adjusted EBITDA margin to be in the range of 13.8% to 14%, with year-over-year net revenue growth of approximately 6.5%. In summary, we're off to a great start in fiscal year 2026 and remain focused on strong execution, profitable growth, and continued capital returns.
Venkatesh Nathamuni: Please note that our guidance does not reflect the announced acquisition of the remaining stake in PA Consulting, and we plan to update our outlook once the deal closes, likely with our Q2 results in May. Based on current assumptions, we expect the acquisition to be accretive to Adjusted EPS in the first 12 months following closing. We anticipate the $16 million to $20 million in projected cost synergies will begin to phase in during fiscal year 2026, with revenue synergies providing incremental upside. As it pertains to Q2, we expect our Adjusted EBITDA margin to be in the range of 13.8% to 14%, with year-over-year net revenue growth of approximately 6.5%. In summary, we're off to a great start in fiscal year 2026 and remain focused on strong execution, profitable growth, and continued capital returns.
With year-over-year, net revenue growth of approximately 6 and a half percent.
In summary, we're off to a great start in fiscal year 26 and remain focused on strong execution.
Speaker #2: Based on current assumptions, we expect the acquisition to be accretive to adjusted EPS in the first 12 months following closing. We anticipate the $16 million to $20 million in projected cost synergies will begin to phase in during fiscal year '26, with revenue synergies providing incremental upside.
Profitable growth and continued Capital returns.
With that, I'll turn the call back over to Bob.
Bob Pragada: Thank you, Bank. In closing, we're tracking very well to the start of the new fiscal year. We performed ahead of our expectations in Q1, enabling us to increase our full-year outlook across three key metrics after just one quarter. Our strong execution, secular growth tailwinds, and the announced acquisition of the remaining stake in PA Consulting position us extremely well to deliver on our FY29 targets. Operator, we will now open the call for questions.
Bob Pragada: Thank you, Bank. In closing, we're tracking very well to the start of the new fiscal year. We performed ahead of our expectations in Q1, enabling us to increase our full-year outlook across three key metrics after just one quarter. Our strong execution, secular growth tailwinds, and the announced acquisition of the remaining stake in PA Consulting position us extremely well to deliver on our FY29 targets. Operator, we will now open the call for questions.
Thank you Bank. In closing we're tracking very well to the start of the new fiscal year. We performed a head of our expectations in q1. Enabling us to increase our full year Outlaw Outlook. 3 key metrics after just 1 quarter
Speaker #2: As it pertains to Q2, we expect our adjusted EBITDA margin to be in the range of 13.8% to 14%, with year-over-year net revenue growth of approximately 6.5%.
Our strong execution, secular growth Tailwinds, and the announced acquisition of the remaining stake in PA consulting position us extremely well to deliver on our FY, 29 targets.
Operator. We will now open the call for questions.
Speaker #2: In summary, we're off to a great start in fiscal year '26 and remain focused on strong execution, profitable growth, and continued capital returns. With that, I'll turn the call back over to Bob.
Venkatesh Nathamuni: With that, I'll turn the call back over to Bob.
Venkatesh Nathamuni: With that, I'll turn the call back over to Bob.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. We also ask that you limit yourself to one question and one follow-up. For any additional questions, please requeue. Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Please go ahead.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. We also ask that you limit yourself to one question and one follow-up. For any additional questions, please requeue. Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Please go ahead.
Speaker #2: Thank you, Venk. In closing, we're tracking very well to the start of the new fiscal year. We performed ahead of our expectations in Q1, enabling us to increase our full-year outlook across three key metrics after just one quarter.
Bob Pragada: Thank you, Venk. In closing, we're tracking very well to the start of the new fiscal year. We performed ahead of our expectations in Q1, enabling us to increase our full-year outlook across three key metrics after just one quarter. Our strong execution, secular growth tailwinds, and the announced acquisition of the remaining stake in PA Consulting position us extremely well to deliver on our FY 2029 targets. Operator, we will now open the call for questions.
Bob Pragada: Thank you, Venk. In closing, we're tracking very well to the start of the new fiscal year. We performed ahead of our expectations in Q1, enabling us to increase our full-year outlook across three key metrics after just one quarter. Our strong execution, secular growth tailwinds, and the announced acquisition of the remaining stake in PA Consulting position us extremely well to deliver on our FY 2029 targets. Operator, we will now open the call for questions.
Thank you. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star 1, we also ask that you limit yourself to 1 question and 1 follow-up for any additional questions. Please, reach you.
And your first question comes from the line of sibaja. Con with RBC Capital markets, please go ahead.
Speaker #2: Our strong execution, secular growth tailwinds, and the announced acquisition of the remaining stake in PA Consulting position us extremely well to deliver on our FY29 targets.
Sabahat Khan: Okay, great. Thanks and good afternoon. Maybe just the higher-level question on sort of the outlook here. Obviously, this last calendar quarter to end the year had some concerns about a government shutdown. Doesn't seem to have flown into your numbers. Similarly, obviously, some puts and takes on the macro. If you can just walk us through kind of what's reflected in your guidance, what it would take to get to sort of closer to that higher end of the top-line guide versus the lower end, and how you've sort of baked in some of the potential green shoots and potential sort of government-related considerations into this updated guidance just to start off. Thanks.
Sabahat Khan: Okay, great. Thanks and good afternoon. Maybe just the higher-level question on sort of the outlook here. Obviously, this last calendar quarter to end the year had some concerns about a government shutdown. Doesn't seem to have flown into your numbers. Similarly, obviously, some puts and takes on the macro. If you can just walk us through kind of what's reflected in your guidance, what it would take to get to sort of closer to that higher end of the top-line guide versus the lower end, and how you've sort of baked in some of the potential green shoots and potential sort of government-related considerations into this updated guidance just to start off. Thanks.
Speaker #2: Operator, we will now open the call for questions.
Speaker #3: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw that question, again, press star one. We also ask that you limit yourself to one question and one follow-up. For any additional questions, please re queue. Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Please go ahead.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw that question, again, press star one. We also ask that you limit yourself to one question and one follow-up. For any additional questions, please re queue. Your first question comes from the line of Sabahat Khan with RBC Capital Markets. Please go ahead.
Speaker #3: And if you'd like to withdraw that question, again, press star one. We also ask that you limit yourself to one question and one follow-up.
Great, thanks and good afternoon. Maybe just the higher level question on to the outlook here and obviously, this last calendar quarter to end the year, had some concerns about a government shutdown. Doesn't seem to have flown into your numbers. Similarly, obviously some puts and takes on the macro if you can just walk us through kind of what's reflected in your guidance, what it would take to get to sort of closer to that higher end of the Top Line guide versus the lower end and how you're sort of baked in some of the the potential green shoots and potential, sort of government related considerations into this updated Guidance just to start off. Thanks.
Speaker #3: For any additional questions, please re-queue. Sabahat Khan, your first question comes from the line of RBC Capital Markets. Please go ahead.
Speaker #4: Okay, great. Thanks and good afternoon. Maybe just the higher-level question on sort of the outlook here. And obviously, this last calendar quarter to end the year had some concerns about a government shutdown.
Sabahat Khan: Okay, great. Thanks, and good afternoon. Maybe just a, the higher level question on sort of the outlook here. And obviously, this last calendar quarter to end the year had some concerns about a government shutdown. Doesn't seem to have flown into your numbers. Similarly, obviously, some puts and takes on the macro. If you can just walk us through kind of what's reflected in your guidance, what it would take to get to sort of closer to that higher end of the top line guide versus the lower end, and how you have sort of baked in some of the, the potential green shoots and potential sort of government-related considerations into this updated guidance, just to start off. Thanks.
Sabahat Khan: Okay, great. Thanks, and good afternoon. Maybe just a, the higher level question on sort of the outlook here. And obviously, this last calendar quarter to end the year had some concerns about a government shutdown. Doesn't seem to have flown into your numbers. Similarly, obviously, some puts and takes on the macro. If you can just walk us through kind of what's reflected in your guidance, what it would take to get to sort of closer to that higher end of the top line guide versus the lower end, and how you have sort of baked in some of the, the potential green shoots and potential sort of government-related considerations into this updated guidance, just to start off. Thanks.
Bob Pragada: Yeah, sure. Sabahat, just on your first one with regards to kind of how we position ourselves within that revenue range that we talked about, I'd say it would be the burn profile of the backlog. We had some really nice wins within our life sciences and advanced manufacturing group driven by data centers and chip manufacturing. Those tend to have pretty high velocity to them. And so if those continue to go at the pace that they are, that would be a driver. And we're also seeing a nice tick-up across the international business. We had an international business that grew over 9% this year, and that was pretty broad-based in Europe, Middle East, as well as in APAC. And so I think that balance of our business and not feeling the effects of the government shutdown has given us confidence in the range that we put out there.
Bob Pragada: Yeah, sure. Sabahat, just on your first one with regards to kind of how we position ourselves within that revenue range that we talked about, I'd say it would be the burn profile of the backlog. We had some really nice wins within our life sciences and advanced manufacturing group driven by data centers and chip manufacturing. Those tend to have pretty high velocity to them. And so if those continue to go at the pace that they are, that would be a driver. And we're also seeing a nice tick-up across the international business. We had an international business that grew over 9% this year, and that was pretty broad-based in Europe, Middle East, as well as in APAC. And so I think that balance of our business and not feeling the effects of the government shutdown has given us confidence in the range that we put out there.
Speaker #4: It doesn't seem to have flowed into your numbers. Similarly, obviously, some puts and takes on the macro. If you can just walk us through kind of what's reflected in your guidance—what it would take to get sort of closer to that higher end of the top-line guide versus the lower end—and how you've sort of baked in some of the potential green shoots and potential sort of government-related considerations into this updated guidance, just to start off.
Yeah. Sure s. Just on your first 1 with regards to kind of how we position ourselves, uh, within that um, that Revenue range that we talked about. I'd say the the it would be the the burn profile of the backlog. Uh, we had some really nice wins within uh, within our life sciences in advanced, manufacturing, group driven by data centers and uh and Chip manufacturing. Um, those tend to have pretty high velocity to them. And so, you know, if
Speaker #4: Thanks.
Speaker #5: Yeah, sure. Sabah, just on your first one, with regards to kind of how we position ourselves within that revenue range that we talked about, I'd say that it would be the burn profile of the backlog.
Bob Pragada: Yeah, sure. Saba, just on your first one, with regards to kind of how we position ourselves within that revenue range that we talked about, I'd say that it would be the burn profile of the backlog. We had some really nice wins within our life sciences and advanced manufacturing group, driven by data centers and in chip manufacturing. Those tend to have pretty high velocity to them. And so, you know, if those continue to go at the pace that they are, that would be a driver. And we're also seeing a nice tick up across the international business. We had an international business that grew over 9% this year, and that's - that was pretty broad-based in Europe, Middle East, as well as in APAC.
Bob Pragada: Yeah, sure. Saba, just on your first one, with regards to kind of how we position ourselves within that revenue range that we talked about, I'd say that it would be the burn profile of the backlog. We had some really nice wins within our life sciences and advanced manufacturing group, driven by data centers and in chip manufacturing. Those tend to have pretty high velocity to them. And so, you know, if those continue to go at the pace that they are, that would be a driver. And we're also seeing a nice tick up across the international business. We had an international business that grew over 9% this year, and that's - that was pretty broad-based in Europe, Middle East, as well as in APAC.
If those, if those continue to go at the pace that they are, uh, that would be a driver. And we're also seeing uh, a nice uh, tick up uh, across the international business. We had a international business that grew over 9%, uh, this year. And that's that was pretty broad-based in Europe, Middle East as well as in uh, in APAC. And so, I think that balance of our business. Uh, and you know, not feeling the effects of, uh, of the government shutdown has, uh, is giving us, uh,
Speaker #5: We had some really nice wins within our life sciences and advanced manufacturing group driven by data centers and chip manufacturing. tend to have pretty high velocity to Those them.
As as as given us confidence in the in the range that we put out there. Um, but again, it'd be the velocity of that private sector work that would get us to the higher range.
Speaker #5: And so, if those continue to go at the pace that they are, that would be a driver. And we're also seeing a nice tick-up across the international business.
Bob Pragada: But again, it'd be the velocity of that private sector work that would get us to the higher range.
Bob Pragada: But again, it'd be the velocity of that private sector work that would get us to the higher range.
Sabahat Khan: Great. And then just for my follow-up, I think it was KeyBanc's comment around the environmental services side of the business doing better in H2. That was a business that investors had some questions about last year just given some of the evolutions and sort of the backdrop. Nice to hear that it's trending in the right direction. Can you maybe just talk about, is it a specific end market that's driving that? Is it just maybe some catch-up in that work? Just kind of the bigger picture demand drivers of the environmental services business because it's been a bit of a focus for investors. Thanks, and I'll pass the line.
Sabahat Khan: Great. And then just for my follow-up, I think it was KeyBanc's comment around the environmental services side of the business doing better in H2. That was a business that investors had some questions about last year just given some of the evolutions and sort of the backdrop. Nice to hear that it's trending in the right direction. Can you maybe just talk about, is it a specific end market that's driving that? Is it just maybe some catch-up in that work? Just kind of the bigger picture demand drivers of the environmental services business because it's been a bit of a focus for investors. Thanks, and I'll pass the line.
Speaker #5: an international business that grew over We had 9% this year, and that was pretty broad-based in Europe, Middle East, as well as in APAC.
Great. And then just for my follow-up, I think um, I was Banks coming around the Environmental Services side of the business doing better in H2. You know, that was a business that investors had some questions about last year, just giving some of the evolutions and sort of the backdrop nice to hear that. It's trending in the right direction. Can you maybe just talk about
Speaker #5: And so I think that balance of our business and not feeling the effects of the government shutdown has given us confidence in the range that we put out there.
Bob Pragada: And so I think that balance of our business, and, you know, not feeling the effects of the government shutdown has given us confidence in the range that we put out there. But again, it'd be the velocity of that private sector work that would get us to the higher range.
Bob Pragada: And so I think that balance of our business, and, you know, not feeling the effects of the government shutdown has given us confidence in the range that we put out there. But again, it'd be the velocity of that private sector work that would get us to the higher range.
Is it a specific End Market? That's driving. That is it just maybe some you know catch up in network. Just kind kind of the bigger picture demand drivers of the environmental services business because it's been a bit of a focus for investors. Thanks and I'll pass the line. Yeah yep. Stop it. I kind of I would I would segregate it into 3 buckets of of how
Speaker #5: But again, it’d be the velocity of that private sector work that would get us to the higher.
Speaker #5: range. Okay,
Bob Pragada: Yeah. Yep. Sabahat, I would segregate it into three buckets of how it affected us over the course of calendar 2025. Now we're starting to see a bit of an inflection point in our pipeline. That's why we were pointed to the second half as a recovery. The government component of that for us is very centric towards the U.S. Department of Defense. Now we're starting to see some larger programs, specifically for the Navy and the U.S. Army Corps of Engineers, come through with some optimism on where we're positioned, long-time clients of ours. So that's kind of one piece. The second piece, and that had some of the indirect effects of DOGE if you think back to 2025. So now we're seeing that flow through. The second is around this transfer around the disaster relief work from the federal government to state and local.
Bob Pragada: Yeah. Yep. Sabahat, I would segregate it into three buckets of how it affected us over the course of calendar 2025. Now we're starting to see a bit of an inflection point in our pipeline. That's why we were pointed to the second half as a recovery. The government component of that for us is very centric towards the U.S. Department of Defense. Now we're starting to see some larger programs, specifically for the Navy and the U.S. Army Corps of Engineers, come through with some optimism on where we're positioned, long-time clients of ours. So that's kind of one piece. The second piece, and that had some of the indirect effects of DOGE if you think back to 2025. So now we're seeing that flow through. The second is around this transfer around the disaster relief work from the federal government to state and local.
Speaker #4: Great. And then just for my follow-up, I think it was Venk's comment around the Environmental Services side of the business doing better in H2.
Sabahat Khan: Great. And then just for my follow-up, I think, Venk's comment around the environmental services side of the business doing better in H2. You know, that was a business that investors had some questions about last year, just given some of the evolutions and sort of the backdrop. Nice to hear that it's trending in the right direction. Can you maybe just talk about, is it a specific end market that's driving that? Is it just maybe some, you know, catch up in that work? Just kind, kind of the bigger picture demand drivers of the environmental services business, because it's been a bit of a focus for investors. Thanks, and I'll pass the line.
Sabahat Khan: Great. And then just for my follow-up, I think, Venk's comment around the environmental services side of the business doing better in H2. You know, that was a business that investors had some questions about last year, just given some of the evolutions and sort of the backdrop. Nice to hear that it's trending in the right direction. Can you maybe just talk about, is it a specific end market that's driving that? Is it just maybe some, you know, catch up in that work? Just kind, kind of the bigger picture demand drivers of the environmental services business, because it's been a bit of a focus for investors. Thanks, and I'll pass the line.
Speaker #4: That was a business that investors had some questions about last year, just given some of the evolutions in sort of the backdrop. Nice to hear that it's trending in the right direction.
Speaker #4: Can you maybe just talk about—is it a specific end market that's driving that? Is it just maybe some catch-up in that work? Just kind of the bigger picture demand drivers of the environmental services business, because it's been a bit of a focus for investors.
Speaker #4: Thanks and I'll pass the line.
Speaker #5: Yeah, yep. Sabah, I would kind of segregate it into three buckets of how it affected us over the course of calendar '25. And now we're starting to see a bit of an inflection point in our pipeline.
Bob Pragada: Yeah. Yep, Saba, I kind of- I would segregate it into three buckets of how, you know, it affected us over the course of calendar 2025, and now we're starting to see a bit of an inflection point in our pipeline. That's why we're pointed to the second half as a recovery. You know, the government component of that for us is very centric towards the US Department of Defense. And now we're starting to see some larger programs, specifically for the Navy and the Army Corps of Engineers, come through with some optimism on where we're positioned, longtime clients of ours. And so that's kind of one piece. The second piece, that had some of the indirect effects of DOGE, if you think back to 2025.
Bob Pragada: Yeah. Yep, Saba, I kind of- I would segregate it into three buckets of how, you know, it affected us over the course of calendar 2025, and now we're starting to see a bit of an inflection point in our pipeline. That's why we're pointed to the second half as a recovery. You know, the government component of that for us is very centric towards the US Department of Defense. And now we're starting to see some larger programs, specifically for the Navy and the Army Corps of Engineers, come through with some optimism on where we're positioned, longtime clients of ours. And so that's kind of one piece. The second piece, that had some of the indirect effects of DOGE, if you think back to 2025.
Speaker #5: That's why we're pointed to the second half. As a recovery, the government component of that for us is very centric towards the U.S. Department of Defense.
Bob Pragada: That has taken a longer time to settle down. And so as that continues to play out, we're starting to see some early indications of that in our pipeline. And then the third is, and we have seen a pickup in this component, is the private sector. And this is kind of the diversity of how we apply our environmental practitioners across our private sector, whether it be industrial or in life sciences and advanced manufacturing. Those jobs have started to pick up. Now, they're smaller in scale, so they're not having an effect right now, but as that continues to grow, and we're seeing again in our pipeline, and that pipeline is up double digits. So that's where we're kind of pointing to the second half.
Bob Pragada: That has taken a longer time to settle down. And so as that continues to play out, we're starting to see some early indications of that in our pipeline. And then the third is, and we have seen a pickup in this component, is the private sector. And this is kind of the diversity of how we apply our environmental practitioners across our private sector, whether it be industrial or in life sciences and advanced manufacturing. Those jobs have started to pick up. Now, they're smaller in scale, so they're not having an effect right now, but as that continues to grow, and we're seeing again in our pipeline, and that pipeline is up double digits. So that's where we're kind of pointing to the second half.
Speaker #5: And now we're starting to see some larger programs, specifically for the Navy and the Army Corps of Engineers, come through with some optimism on where we're positioned—long-time clients of ours.
Speaker #5: And so that's kind of one piece. The second piece—and that was, had some of the indirect effects of DOGE, if you think back to '25.
Bob Pragada: So now we're seeing that flow through. The second is around this transfer around the disaster relief work from the federal government to state and local. That has taken a longer time to settle down. And so as that continues to play out, we're starting to see some early indications of that in our pipeline. And then the third is, and this we have seen a pickup in this component, is the private sector. And this is kind of the diversity of how we apply our environmental practitioners across our private sector in whether it be industrial or in life sciences and advanced manufacturing. Those jobs have started to pick up. Now, they're smaller in scale, so they're not having an effect right now.
Speaker #5: So now we're seeing that flow through. The second is around this transfer around the disaster relief work from the federal government to the state and local.
Bob Pragada: So now we're seeing that flow through. The second is around this transfer around the disaster relief work from the federal government to state and local. That has taken a longer time to settle down. And so as that continues to play out, we're starting to see some early indications of that in our pipeline. And then the third is, and this we have seen a pickup in this component, is the private sector.
Speaker #5: That has taken a longer time to settle down. And so as that continues to play out, we're starting to see some early indications of that in our pipeline.
Indications of that, in our, in our, uh, in our pipeline. Uh, and then the third is in this. We have seen a pickup in this, this component is, uh, is the private sector. Uh, and and this is is kind of the diversity of how we apply our environmental practitioners across our private sector in, uh, in whether it be industrial or in life, sciences and investment manufacturing. Um, those jobs have started to pick up, now, they're smaller in scale. Uh, so the, the, they're not having an effect right now, but as that continues to grow, uh, and we're seeing again in our Pipeline and that pipeline is up double digits. Uh, so that's where we're kind of pointing to the second half.
Speaker #5: And then the third is, in this, we have seen a pickup in this component—it's the private sector. And this is kind of the diversity of how we apply our environmental practitioners.
You. Our next question comes from the line of Michael dudes, with vertical research Partners, please go ahead.
Good afternoon, gentlemen.
Operator: Your next question comes from the line of Michael Dudas with Vertical Research Partners. Please go ahead.
Operator: Your next question comes from the line of Michael Dudas with Vertical Research Partners. Please go ahead.
My good afternoon.
Bob Pragada: And this is kind of the diversity of how we apply our environmental practitioners across our private sector in whether it be industrial or in life sciences and advanced manufacturing. Those jobs have started to pick up. Now, they're smaller in scale, so they're not having an effect right now. But as that continues to grow, and we're seeing again in our pipeline, and that pipeline is up double digits, so that's where we're kind of pointing to the H2.
Uh, Bob very impressive, certainly on the book to Bill.
Bob Pragada: Good afternoon, gentlemen.
Michael Dudas: Good afternoon, gentlemen.
Speaker #5: sector in whether it be industrial or in life sciences and advanced Across our private manufacturing, those jobs have started to pick up. Now, they're smaller in scale, so they're not having an effect right now.
Sabahat Khan: Mike, good afternoon.
Bob Pragada: Mike, good afternoon.
Seems like the project.
Michael Dudas: Bob, very impressive, certainly, on the book-to-bill. Sure. Seems like the projects.
Michael Dudas: Bob, very impressive, certainly, on the book-to-bill. Sure. Seems like the projects.
Pardoning the interruption Michael. We are having a hard time hearing you.
Speaker #5: But as that continues to grow, and we're seeing again in our pipeline—and that pipeline is up double digits—so that's where we're kind of pointing to the second...
Bob Pragada: But as that continues to grow, and we're seeing again in our pipeline, and that pipeline is up double digits, so that's where we're kind of pointing to the second half.
Can you hear me now?
Operator: Pardon the interruption, Michael. We are having a hard time hearing you.
Bob Pragada: Pardon the interruption, Michael. We are having a hard time hearing you.
Speaker #5: half.
Sabahat Khan: Can you hear me now?
Michael Dudas: Can you hear me now?
Speaker #3: Your next question
Operator: Your next question comes from the line of Michael Dudas with Vertical Research Partners. Please go ahead.
Operator: Your next question comes from the line of Michael Dudas with Vertical Research Partners. Please go ahead.
Bob Pragada: Yep, got you now, Mike.
Bob Pragada: Yep, got you now, Mike.
Speaker #3: comes from the line of Michael Dudas with Vertical Research Partners. Please go ahead.
Sabahat Khan: Okay. Thank you very much. So, Bob, very impressive on the book-to-bill, backlog growth in Q1. Maybe you could share on the it looks like the projects are getting larger, a little longer for gestation, but much more complex. And how that plays towards what your current pipeline looks, maybe that two-year pipeline outlook, and the ability to gain more, I guess, life cycle revenues or business out of the bidding that you're working on with the negotiation with these larger projects with the clients that are certainly we've been reading about in the press that seem to be accelerating their cap spend, especially in your important private sector markets.
Michael Dudas: Okay. Thank you very much. So, Bob, very impressive on the book-to-bill, backlog growth in Q1. Maybe you could share on the it looks like the projects are getting larger, a little longer for gestation, but much more complex. And how that plays towards what your current pipeline looks, maybe that two-year pipeline outlook, and the ability to gain more, I guess, life cycle revenues or business out of the bidding that you're working on with the negotiation with these larger projects with the clients that are certainly we've been reading about in the press that seem to be accelerating their cap spend, especially in your important private sector markets.
Speaker #6: Good afternoon, gentlemen.
Michael Dudas: Good afternoon, gentlemen.
Michael Dudas: Good afternoon, gentlemen.
Speaker #5: Mike, good afternoon.
Bob Pragada: Mike, good afternoon.
Bob Pragada: Mike, good afternoon.
Michael Dudas: Bob, very impressive, certainly on the book-to-bill. Sure. Seems like the projects are-
Michael Dudas: Bob, very impressive, certainly on the book-to-bill. Sure. Seems like the projects are-
Speaker #6: Bob, very impressive, certainly, on the book, too.
Speaker #6: bill.
Speaker #7: Sure. It seems
Speaker #7: like the projects.
Operator: Pardon the interruption, Michael, we are having a hard time hearing you.
Operator: Pardon the interruption, Michael, we are having a hard time hearing you.
Speaker #3: Turning to the interruption. Michael, we are having a hard time hearing you.
Yep. Got you now Mike? Okay, thank you very much. So um, my bad Bob um, you know, very impressive on the book, The Bill backlog growth in q1, maybe you could share on the. It looks like the projects are getting larger, a little longer for gestation but uh much more complex and how that plays towards what your current pipeline looks maybe that 2 year pipeline Outlook and the ability to gain more, I guess, life, cycle revenues, or business out of the bidding that you're you're working on with the negotiation with these larger projects with the clients. That are certainly we've been reading about and in the Press uh that seem to be accelerating their their cap spend and your especially in your important private sector markets.
Speaker #4: Can you hear me now? Yep, got it. Okay, thank you.
Michael Dudas: Can you hear me now?
Michael Dudas: Can you hear me now?
Bob Pragada: Yep, got you now, Mike.
Bob Pragada: Yep, got you now, Mike.
Speaker #5: you now, Mike.
Michael Dudas: Okay. Thank you very much. So, my bad. Bob, on, you know, very impressive on the book-to-bill backlog growth in Q1. Maybe you could share on the... It looks like the projects are getting larger, a little longer for gestation, but much more complex, and how that plays towards what your current pipeline looks, maybe that two-year pipeline outlook, and the ability to gain more, I guess, life cycle revenues or business out of the bidding that you're working on with the negotiation with these larger projects, with the clients that are certainly we've been reading about in the press that seem to be accelerating their cap spend in your, especially in your important private sector markets.
Michael Dudas: Okay. Thank you very much. So, my bad. Bob, on, you know, very impressive on the book-to-bill backlog growth in Q1. Maybe you could share on the... It looks like the projects are getting larger, a little longer for gestation, but much more complex, and how that plays towards what your current pipeline looks, maybe that two-year pipeline outlook, and the ability to gain more, I guess, life cycle revenues or business out of the bidding that you're working on with the negotiation with these larger projects, with the clients that are certainly we've been reading about in the press that seem to be accelerating their cap spend in your, especially in your important private sector markets.
Speaker #4: Very much. So Bob, I'm very impressed with the book-to-bill backlog growth in Q1. Maybe you could share— it looks like the projects are getting larger, a little longer for gestation, but much more complex.
Bob Pragada: Yeah. Thanks, Mike. I'd say maybe one comment on the overall portfolio, and then I'll talk specifically about what we're seeing in the private sector accelerate at a faster pace. Overall, this was always in our strategy. We talked about it. We talked about it at Investor Day with regards to redefining the asset life cycle and continuing to work across that. That is happening on a broad base. I'd say that gestation period of the work, probably it's going faster within water, a little longer in transportation, energy, and power, but we're moving at pace. Private sector is happening in real time, and a lot of it is for just the demand cycle that's happening in those end markets, whether it be data centers, chip manufacturing, and in life sciences. So for us, that business is in growth mode. We are seeing the pipeline grow at some significant rates.
Bob Pragada: Yeah. Thanks, Mike. I'd say maybe one comment on the overall portfolio, and then I'll talk specifically about what we're seeing in the private sector accelerate at a faster pace. Overall, this was always in our strategy. We talked about it. We talked about it at Investor Day with regards to redefining the asset life cycle and continuing to work across that. That is happening on a broad base. I'd say that gestation period of the work, probably it's going faster within water, a little longer in transportation, energy, and power, but we're moving at pace. Private sector is happening in real time, and a lot of it is for just the demand cycle that's happening in those end markets, whether it be data centers, chip manufacturing, and in life sciences. So for us, that business is in growth mode. We are seeing the pipeline grow at some significant rates.
Speaker #4: And how that plays towards what your current pipeline looks like, maybe that two-year pipeline outlook, and the ability to gain more, I guess, lifecycle revenues or business out of the bidding that you're working on with the negotiation with these larger projects, with the clients that are certainly pressed, that seem to be accelerating their cap spend, and especially in your important private sector markets.
Speaker #5: Yeah, thanks, Mike. I'd say maybe one comment on the overall portfolio, and then I'll talk specifically about what we're seeing in the private sector accelerate at a faster pace.
Yeah, the thanks Mike. Um, you know, I I'd say maybe 1 comments in the, in the private sector accelerate at a faster Pace. Um, overall, this is always in our strategy, we talked about it. Uh, you know, we talked about it at investor day with regards to, uh, redefining the asset life cycle and continue to work across that that is happening on a broad base. I'd say that gestation period of the work probably, it's going faster within water, a little longer in transportation and uh, and energy and power, but we're we're, we're moving. Uh, at at PACE private sector is happening in real time and a lot of it is for just the demand cycle that's happening in those end.
Bob Pragada: Thanks, Mike. You know, I'd say maybe one comment on the overall portfolio, and then I'll talk specifically about what we're seeing in the private sector accelerate at a faster pace. Overall, this was always in our strategy. We talked about it, you know, we talked about it at Investor Day with regards to redefining the asset life cycle and continuing to work across that. That is happening on a broad base. I'd say that gestation period of the work, probably it's going faster within water, a little longer in transportation and in energy and power, but we're moving at pace.
Bob Pragada: Thanks, Mike. You know, I'd say maybe one comment on the overall portfolio, and then I'll talk specifically about what we're seeing in the private sector accelerate at a faster pace. Overall, this was always in our strategy. We talked about it, you know, we talked about it at Investor Day with regards to redefining the asset life cycle and continuing to work across that. That is happening on a broad base. I'd say that gestation period of the work, probably it's going faster within water, a little longer in transportation and in energy and power, but we're moving at pace.
Speaker #5: Overall, this has always been our strategy. We talked about it. We talked about it at Investor Day with regards to redefining the asset life cycle and continuing to work across that.
Speaker #5: That is happening on a broad base. I'd say that gestation period of the work probably it's going faster within water, a little longer in transportation and energy and power.
Bob Pragada: I'd say that 2-year pipeline that you're referencing, 1 year, it's greater than 50% if I were to have a composite rate. And as you get past that period, private sector, we don't really get past 18 months with any kind of high level of certainty in pipeline, but that 12 to 18 months, definitely greater than 50% on a composite rate.
Bob Pragada: I'd say that 2-year pipeline that you're referencing, 1 year, it's greater than 50% if I were to have a composite rate. And as you get past that period, private sector, we don't really get past 18 months with any kind of high level of certainty in pipeline, but that 12 to 18 months, definitely greater than 50% on a composite rate.
Speaker #5: But we're moving at pace. Private sector is happening in real time, and a lot of it is for just the demand cycle that's happening in those end markets, whether it be data centers, chip manufacturing, or life sciences.
Markets, whether it be data centers, chip manufacturing, uh, and Life Sciences. Um, so for, for us that business is in growth mode. We are seeing the pipeline grow at, uh, at some significant rates. Uh, I'd say that 2 year pipeline that you're referencing. Uh, 1 year, it's greater than 50%. If I were to have a composite rate and as you get past, uh, past that period private sector. We don't really get past 18 months, uh, with any kind of high level of assurity and pipeline, but that 12 to 18 months, definitely greater than 50% on a composite rate.
Bob Pragada: Private sector is happening in real time, and a lot of it is for just the demand cycle that's happening in those end markets, whether it be data centers, chip manufacturing, and life sciences. So for, for us, that business is in growth mode. We are seeing the pipeline grow at, at some significant rates. I'd say that 2-year pipeline that you're referencing, 1 year it's greater than 50%, if I were to have a composite rate. And as you get past, past that period, private sector, we don't really get past 18 months, with any kind of high level of assurance in pipeline, but that 12 to 18 months, definitely greater than 50% on a composite rate.
Bob Pragada: Private sector is happening in real time, and a lot of it is for just the demand cycle that's happening in those end markets, whether it be data centers, chip manufacturing, and life sciences. So for, for us, that business is in growth mode. We are seeing the pipeline grow at, at some significant rates. I'd say that 2-year pipeline that you're referencing, 1 year it's greater than 50%, if I were to have a composite rate. And as you get past, past that period, private sector, we don't really get past 18 months, with any kind of high level of assurance in pipeline, but that 12 to 18 months, definitely greater than 50% on a composite rate.
Speaker #5: So for us, that business is in growth mode. We are seeing the pipeline grow at some significant rates. I’d say that two-year pipeline that you’re referencing, one year, it’s greater than 50%.
Sabahat Khan: I appreciate that. Excellent, Bob. And my follow-up for Bob, with the very strong Q1 start on cash flow and the dynamics throughout the year, so given the financing that you're participating on PA and such, the 60% free cash off the company is still targeted towards, again, the share repurchase on a more ratable basis. You feel still comfortably to de-lever and add opportunistically when the market requires on your cap allocation in this year?
Michael Dudas: I appreciate that. Excellent, Bob. And my follow-up for Bob, with the very strong Q1 start on cash flow and the dynamics throughout the year, so given the financing that you're participating on PA and such, the 60% free cash off the company is still targeted towards, again, the share repurchase on a more ratable basis. You feel still comfortably to de-lever and add opportunistically when the market requires on your cap allocation in this year?
Speaker #5: If I were to have a composite rate, and as you get past that period, private sector, we don't really get past 18 months with any kind of high level of assurity in pipeline, but that 12 to 18 months, definitely greater than 50% on a composite rate.
I appreciate that. Excellent Bob and and and my follow up for Bank, um you you know with the very strong q1 start on cash flow and and the Dynamics throughout the year. Um, so given the, the financing that you're participating on on PA and such uh, to be the 60% free cash off the company is still targeted towards again, the the share repurchase on a more wrappable basis. You, you feel still comfortable to de-lever and add opportunistically. When when the market requires on on your Capital, allocation in this year?
Speaker #4: I appreciate that. Excellent, Bob. And my follow-up for Venk, with the very strong Q1 start on cash flow and the dynamics throughout the year—so given the financing that you're participating on PA and such—the 60% free cash off the company is still targeted towards, again, the share repurchase on a more variable basis?
Michael Dudas: I appreciate that. Excellent, Bob. And, like, follow-up for Venk, you know, with the very strong Q1 start on cash flow and the dynamics throughout the year, so given the financing that you're participating on, on PA and such, the 60% free cash off the company is still targeted towards, again, the share repurchase on a more regular basis. You feel still comfortably to delever and add opportunistically when the market requires, on your capital allocation this, in this year?
Michael Dudas: I appreciate that. Excellent, Bob. And, like, follow-up for Venk, you know, with the very strong Q1 start on cash flow and the dynamics throughout the year, so given the financing that you're participating on, on PA and such, the 60% free cash off the company is still targeted towards, again, the share repurchase on a more regular basis. You feel still comfortably to delever and add opportunistically when the market requires, on your capital allocation this, in this year?
Venk Nathamuni: Yeah, Mike, thanks for that question. As you pointed out, pretty strong start to the year in terms of free cash flow generation. We feel pretty good about where we'll end the year, which is why we raised the guidance. As it relates to our current position in terms of repurchases, obviously, we increased our repurchases in Q1 to take advantage of the market dislocation, as I mentioned in the script. We also increased our dividends. We feel very good about our commitment to returning 60% plus of free cash flow to shareholders. At the same time, with the solid balance sheet and the good cash flow that we're generating, we also want to quickly de-lever from the 1 to 1.5x range.
Venk Nathamuni: Yeah, Mike, thanks for that question. As you pointed out, pretty strong start to the year in terms of free cash flow generation. We feel pretty good about where we'll end the year, which is why we raised the guidance. As it relates to our current position in terms of repurchases, obviously, we increased our repurchases in Q1 to take advantage of the market dislocation, as I mentioned in the script. We also increased our dividends. We feel very good about our commitment to returning 60% plus of free cash flow to shareholders. At the same time, with the solid balance sheet and the good cash flow that we're generating, we also want to quickly de-lever from the 1 to 1.5x range.
Speaker #4: de-lever and add, you feel still comfortable to opportunistically—when the market requires—on your capital allocation in this
Speaker #4: year? Yeah, Mike, thanks
Venkatesh Nathamuni: Yeah, Mike, thanks for that question, and as you pointed out, you know, pretty strong start to the year in terms of free cash flow generation, and we feel pretty good about, you know, where we end the year, which is why we raised the guidance. So as it relates to, you know, our current position as, you know, in terms of repurchases, obviously, we increased our repurchases in Q1 to take advantage of the market dislocation, as I mentioned in the script. But we also increased our dividends. So we feel very good about our commitment to returning 60% plus of free cash flow to shareholders.
Venkatesh Nathamuni: Yeah, Mike, thanks for that question, and as you pointed out, you know, pretty strong start to the year in terms of free cash flow generation, and we feel pretty good about, you know, where we end the year, which is why we raised the guidance. So as it relates to, you know, our current position as, you know, in terms of repurchases, obviously, we increased our repurchases in Q1 to take advantage of the market dislocation, as I mentioned in the script. But we also increased our dividends. So we feel very good about our commitment to returning 60% plus of free cash flow to shareholders.
Speaker #5: And as you pointed out, pretty strong start to the year in terms of free cash flow generation. And we feel pretty good about where we end the year, which is why we raised the guidance.
Venk Nathamuni: When we do the PA financing, we have a good line of sight to be able to get to that range within the first four quarters. So solid cash position to start with, really good cash flow, and we have enough firepower to allocate our capital between repurchases as well as debt paid out.
Venk Nathamuni: When we do the PA financing, we have a good line of sight to be able to get to that range within the first four quarters. So solid cash position to start with, really good cash flow, and we have enough firepower to allocate our capital between repurchases as well as debt paid out.
Speaker #5: So, as it relates to our current position in terms of repurchases, obviously, we increased our repurchases in Q1 to take advantage of the market dislocation, as I mentioned in the script. But we also increased our dividend.
Yeah, Mike, thanks for that question. And as you pointed out, you know, pretty strong start to there in terms of free cash flow generation. And we feel pretty good about, uh, you know, where, where we end the year, which is why we raised the guidance. So as it relates to, you know, our current uh, position is, you know, in terms of repurchases, obviously, we increased our uh, repurchases in q1, uh, to take advantage of the market dislocation, as I mentioned in the script. Uh, but we're also increased our dividend. So we feel very good about, uh, our commitment to returning 60% plus of free cash flow to shareholders at the same time, with the solid balance sheet and the and the good cash flow that we're generating. We also want to, you know, quickly deliver from the 1 to 1.5 x range. Uh, when we do the PA financing, we we have good line of sight to be able to get to that range within the first 4 quarters. So a solid cash position start with really good cash flow. And uh and you know, we have enough Firepower to allocate our Capital between repurchases as well as uh debt paid out.
Thanks gentlemen.
Thank you.
Speaker #5: So we feel very good about our commitment to returning 60% plus of free cash flow to shareholders. At the same time, with the solid balance sheet and the good cash flow that we're generating, we also want to quickly de-lever from the 1 to 1.5x range when we do the PA financing.
Your next question comes from the line of sanjeeta Jane with keybanc capital markets, please go ahead.
Sabahat Khan: Thanks, gentlemen.
Michael Dudas: Thanks, gentlemen.
Venk Nathamuni: Thank you.
Venk Nathamuni: Thank you.
Venkatesh Nathamuni: At the same time, with a solid balance sheet and the good cash flow that we're generating, we also want to, you know, quickly delever from the 1 to 1.5x range. When we do the PA financing, we'll have good line of sight to be able to get to that range within the first four quarters. So a solid cash position to start with, really good cash flow, and, you know, we have enough firepower to allocate our capital between repurchases as well as debt paid out.
Venkatesh Nathamuni: At the same time, with a solid balance sheet and the good cash flow that we're generating, we also want to, you know, quickly delever from the 1 to 1.5x range. When we do the PA financing, we'll have good line of sight to be able to get to that range within the first four quarters. So a solid cash position to start with, really good cash flow, and, you know, we have enough firepower to allocate our capital between repurchases as well as debt paid out.
Operator: Your next question comes from the line of Sangita Jain with KeyBanc Capital Markets. Please go ahead.
Operator: Your next question comes from the line of Sangita Jain with KeyBanc Capital Markets. Please go ahead.
Sangita Jain: Great. Thank you. Good afternoon. Thanks for taking my questions. If I can follow up on the cash flow question, Venk, you said cash flow in the quarter was quite high, but some of it may reverse in the second quarter. Could you elaborate on what that reversal relates to? And also, I was under the impression there was going to be some cash tax payments that you would have to take care of in the first half. Has the timing of that changed?
Sangita Jain: Great. Thank you. Good afternoon. Thanks for taking my questions. If I can follow up on the cash flow question, Venk, you said cash flow in the quarter was quite high, but some of it may reverse in the second quarter. Could you elaborate on what that reversal relates to? And also, I was under the impression there was going to be some cash tax payments that you would have to take care of in the first half. Has the timing of that changed?
Speaker #5: We have good line of sight to be able to get to that range within the first four quarters. So, solid cash position to start with, really good cash flow, and we have enough firepower to allocate our capital between repurchases as well as debt paid out.
Thank you, good afternoon. Thanks for taking my questions. Um, if I can follow up on the cash flow question, uh, when you said cash is the quarter was quite high but some of it may reverse in the second quarter. Could you elaborate on what that reversal relates to? And also I was under the impression that was going to be some cash, tax payments that you would have to take care of in the first half. Half the timing of that change.
Speaker #4: Thanks,
Michael Dudas: Thanks, gentlemen.
Michael Dudas: Thanks, gentlemen.
Speaker #4: gentlemen.
Bob Pragada: Thank you.
Bob Pragada: Thank you.
Speaker #3: Your next question comes from the line of Sanjita Jain with KeyBank Capital Markets. Please go ahead.
Operator: Your next question comes from the line of Sangita Jain with KeyBanc Capital Markets. Please go ahead.
Operator: Your next question comes from the line of Sangita Jain with KeyBanc Capital Markets. Please go ahead.
Venk Nathamuni: Yeah. It's funny that yeah, thanks for the question. So as you pointed out, a really good cash flow in the first fiscal quarter. I would say the vast majority of that strong cash flow was driven by really fantastic working capital performance across the entirety of our customer base. So that was number one. We also had a one-time impact from a customer in the data center space where we collect the revenue and the cash during a particular quarter, and then we pay the subcontractor in subsequent quarters. So that's what's going to drive the free cash flow performance in Q2. But we have very good visibility that in the first half, we will still be free cash flow positive. And the tax payment, as you mentioned, is going to be a Q2 phenomenon. So that'll impact Q2.
Venk Nathamuni: Yeah. It's funny that yeah, thanks for the question. So as you pointed out, a really good cash flow in the first fiscal quarter. I would say the vast majority of that strong cash flow was driven by really fantastic working capital performance across the entirety of our customer base. So that was number one. We also had a one-time impact from a customer in the data center space where we collect the revenue and the cash during a particular quarter, and then we pay the subcontractor in subsequent quarters. So that's what's going to drive the free cash flow performance in Q2. But we have very good visibility that in the first half, we will still be free cash flow positive. And the tax payment, as you mentioned, is going to be a Q2 phenomenon. So that'll impact Q2.
Sangita Jain: Great. Thank you. Good afternoon. Thanks for taking my questions. If I can follow up on the cash flow question, Venk, you said cash flow in the quarter was quite high, but some of it may reverse in the second quarter. Could you elaborate on what that reversal relates to? And also, I was under the impression there was gonna be some cash tax payments that you would have to take care of in the first half. Has the timing of that changed?
Sangita Jain: Great. Thank you. Good afternoon. Thanks for taking my questions. If I can follow up on the cash flow question, Venk, you said cash flow in the quarter was quite high, but some of it may reverse in the second quarter. Could you elaborate on what that reversal relates to? And also, I was under the impression there was gonna be some cash tax payments that you would have to take care of in the first half. Has the timing of that changed?
Speaker #8: Great, thank you. Good afternoon. Thanks for taking my questions. If I can follow up on the cash flow question, Venk, you said cash flow in the quarter was quite high, but some of it may reverse in the second quarter.
Speaker #8: Could you elaborate on what that reversal relates to? And also, I was under the impression there were going to be some cash tax payments that you would have to take care of in the first half.
Speaker #8: Has the timing of that changed?
Speaker #5: Yeah. Sanjita, yeah, thanks for the question. So as you pointed out in a really good cash flow in the first fiscal quarter, I would say the vast majority of that strong cash flow was driven by really fantastic working capital performance across the entirety of our customer base.
Venkatesh Nathamuni: Yeah. Sangita, yeah, thanks for the question. So, as you pointed out, you know, a really good cash flow in the first, first fiscal quarter. I would say the, the vast majority of that, strong cash flow was driven by really fantastic working capital performance across the entirety of our, customer base. So that was number one. We also had a one-time, you know, impact from a customer in the data center space, you know, where we collect the revenue, and, and the cash during a particular, quarter, and then we, we pay the sub, the subcontractor in subsequent quarters. So that's what's going to, drive the free cash flow performance in Q2. But we have, very good visibility that, you know, in the first half, we'll still be free cash flow positive.
Venkatesh Nathamuni: Yeah. Sangita, yeah, thanks for the question. So, as you pointed out, you know, a really good cash flow in the first, first fiscal quarter. I would say the, the vast majority of that, strong cash flow was driven by really fantastic working capital performance across the entirety of our, customer base. So that was number one. We also had a one-time, you know, impact from a customer in the data center space, you know, where we collect the revenue, and, and the cash during a particular, quarter, and then we, we pay the sub, the subcontractor in subsequent quarters. So that's what's going to, drive the free cash flow performance in Q2. But we have, very good visibility that, you know, in the first half, we'll still be free cash flow positive.
Yeah, uh, it's something that. Yeah, thanks for the question. So, uh, as you pointed out, you know, a really good cash flow in the first first, first, first quarter. Uh, I would say the the vast majority of that strong cash flow was driven by really fantastic working. Capital Performance across the entirety of our, uh, customer base. So that was number 1. We also had a 1-time, uh, you know, impact, from a customer in the data center space, uh, you know, where we collect the revenue, uh, and and the cash flowing a particular quarter and then we, we pay the, the subcontractor and subsequent quarter. So that's what's going to drive. The free cash flow performance in Q2. But we have very good visibility that, you know, in the first half we will still be free, cash flow positive, uh, and uh, the tax payment, as you mentioned is going to be a Q2 phenomenon. So that'll impact you too. But when you look at first half and, uh, first couple of quarters in, uh, aggregate, we feel pretty good about our free cash flow being positive.
Venk Nathamuni: But when you look at first half and first couple of quarters in aggregate, we feel pretty good about our free cash flow being positive for the first six months of the year, and obviously continued strength in Q3 and Q4 such that we're able to get to the 7% to 8.5% range.
Venk Nathamuni: But when you look at first half and first couple of quarters in aggregate, we feel pretty good about our free cash flow being positive for the first six months of the year, and obviously continued strength in Q3 and Q4 such that we're able to get to the 7% to 8.5% range.
for the first 6 months of the year and obviously continued strength in Q3 and Q4
Speaker #5: So that was number one. We also had a one-time impact from a customer in the data center space. We collect the revenue and the cash during a particular quarter, and then we pay the subcontractor in subsequent quarters.
such that we're able to get to the 78 and a half percent range.
Got it. Thank you. I appreciate that. I bet. Um, as a
Sangita Jain: Got it. Thank you. I appreciate that.
Sangita Jain: Got it. Thank you. I appreciate that.
Sabahat Khan: Thank you.
Venk Nathamuni: Thank you.
Sangita Jain: As a follow-up, can I ask about the Sizewell C contract that you press released a while back in the UK? And if you can elaborate on the size of that, and if there is further scope, if there's a chance that the scope on that may increase over time.
Sangita Jain: As a follow-up, can I ask about the Sizewell C contract that you press released a while back in the UK? And if you can elaborate on the size of that, and if there is further scope, if there's a chance that the scope on that may increase over time.
Speaker #5: So that's what's going to drive the free cash flow performance in Q2. But we have very good visibility that in the first half, we will still be free cash flow positive.
Followup can I ask about the size? We'll see contract that you press released a while back in the UK and if you can elaborate on this 5 of that and if there is further scope, if there's a chance that the scope on that may increase over time,
Venkatesh Nathamuni: The tax payment, as you mentioned, is going to be a Q2 phenomenon, so that'll impact Q2. But when you look at first half and first couple of quarters in aggregate, we feel pretty good about our Free Cash Flow being positive for the first six months of the year, and obviously continued strength in Q3 and Q4, such that we're able to get to the 7 to 8.5% range.
Speaker #5: And the tax payment, as you mentioned, is going to be a Q2 phenomenon. So that will impact Q2. But when you look at the first half and the first couple of quarters in aggregate, we feel pretty good about our free cash flow being positive for the first six months of the year.
Venkatesh Nathamuni: The tax payment, as you mentioned, is going to be a Q2 phenomenon, so that'll impact Q2. But when you look at first half and first couple of quarters in aggregate, we feel pretty good about our Free Cash Flow being positive for the first six months of the year, and obviously continued strength in Q3 and Q4, such that we're able to get to the 7 to 8.5% range.
Bob Pragada: It could. Just to clarify on that, Sangita, we're performing the enabling works and the program management around the enabling works. And so that has continued through 2024. Actually, it started even before 2025, 2024, 2025, and will continue into 2026. There is opportunity for continued scope growth on that, and our relationship there with Sizewell C is strong. So we would anticipate so.
Bob Pragada: It could. Just to clarify on that, Sangita, we're performing the enabling works and the program management around the enabling works. And so that has continued through 2024. Actually, it started even before 2025, 2024, 2025, and will continue into 2026. There is opportunity for continued scope growth on that, and our relationship there with Sizewell C is strong. So we would anticipate so.
Speaker #5: And obviously, continued strength in Q3 and Q4, such that we're able to get to the 7 to 8.5 percent range.
Speaker #8: Got it. Thank you, appreciate that. As a follow-up, can I ask about the size we'll see contracts that you press released a while back in the UK?
Sangita Jain: Got it. Thank you. Appreciate that.
Sangita Jain: Got it. Thank you. Appreciate that.
Venkatesh Nathamuni: Okay.
Venkatesh Nathamuni: Okay.
Sangita Jain: And then, as a follow-up, can I ask about the Sizewell C contract that you press-released a while back in the UK? And if you can elaborate on the size of that and if there is further scope or if there's a chance that the scope on that may increase over time?
Sangita Jain: And then, as a follow-up, can I ask about the Sizewell C contract that you press-released a while back in the UK? And if you can elaborate on the size of that and if there is further scope or if there's a chance that the scope on that may increase over time?
It it, it could we're doing just a clarify on that sigita, we're performing the enabling works and the program management around the enabling works. And so that has continued through uh, 24. Actually it started even before 25 uh, 24 255 and and we will continue into 26 there. There is opportunity for continued scope growth on that and our, our relationship there with size. We'll see is strong. So we would anticipate, so,
Got it. Thank you.
Your next question.
Speaker #8: And if you can elaborate on the size of that, and if there is further scope—if there's a chance that the scope on that may increase over—
Fischer with UBS. Please go ahead.
Sangita Jain: Got it. Thank you so much.
Sangita Jain: Got it. Thank you so much.
Speaker #8: time. It could.
Operator: Your next question comes from the line of Stephen Fisher with UBS. Please go ahead.
Operator: Your next question comes from the line of Stephen Fisher with UBS. Please go ahead.
Bob Pragada: ... It could. We're doing, just to clarify on that, Sangita, we're performing the enabling works and the program management around the enabling works, and so, that has continued through 2024. Actually, it started even before 2025, 2024, 2025, and will continue into 2026. There is opportunity for continued scope growth on that, and our relationship there with Sizewell C is strong, so we would anticipate so.
Bob Pragada: It could. We're doing, just to clarify on that, Sangita, we're performing the enabling works and the program management around the enabling works, and so, that has continued through 2024. Actually, it started even before 2025, 2024, 2025, and will continue into 2026. There is opportunity for continued scope growth on that, and our relationship there with Sizewell C is strong, so we would anticipate so.
Speaker #5: We're doing—just to clarify on that, Sanjita—we're performing the enabling works and the program management around the enabling works. And so, that has continued through '24; actually, it started even before '25.
Sabahat Khan: Thanks. Good afternoon. Just in light of the backlog growth, obviously, we know from some of the press releases descriptions of what your scope is on some of these projects, but just curious what some of the pass-through things are that are going through there. And maybe if you can give us maybe a sense of maybe looking at the profit increase in backlog might be more representative. I know you said 15% year-over-year. Curious if you can give us some measure of that sequentially?
Steven Fisher: Thanks. Good afternoon. Just in light of the backlog growth, obviously, we know from some of the press releases descriptions of what your scope is on some of these projects, but just curious what some of the pass-through things are that are going through there. And maybe if you can give us maybe a sense of maybe looking at the profit increase in backlog might be more representative. I know you said 15% year-over-year. Curious if you can give us some measure of that sequentially?
Speaker #5: Twenty-four, twenty-five. And we'll continue into twenty-six. There is opportunity for continued scope growth on that. And our relationship there with SWSI, we'll see, is strong.
Oh thanks. Good afternoon. Just uh, in light of the, the backlog growth. Obviously, we know from some of the press releases descriptions of what your scope is on some of these projects, but just curious what some of the the pass through things are uh that are going through their uh and and maybe if you can give us, uh, maybe a sense.
Speaker #5: So we would anticipate so.
Speaker #8: Got it. Thank you so
Adam Bubes: Got it. Thank you so much.
Sangita Jain: Got it. Thank you so much.
Of maybe looking at the The Profit increase in backlog, might be more representative. I know you said 15% year-over-year, curious, if you can give us some measure of that sequentially.
Speaker #8: much. Your next
Operator: Your next question comes from the line of Steven Fisher with UBS. Please go ahead.
Operator: Your next question comes from the line of Steven Fisher with UBS. Please go ahead.
Speaker #3: The question comes from the line of Steven Fisher with UBS. Please go ahead.
Speaker #4: Well, thanks. Good afternoon. Just in light of the backlog growth—obviously, we know from some of the press releases, descriptions of what your scope is on some of these projects—but just curious what some of the pass-through things are that are going through there.
Steven Fisher: Well, thanks. Good afternoon. Just in light of the backlog growth, obviously we know from some of the press releases, descriptions of what your scope is on some of these projects, but just curious what some of the pass-through things are that are going through there. And maybe if you can give us maybe a sense of maybe looking at the profit increase in backlog might be more representative. I know you said 15% year-over-year. Curious if you can give us some measure of that sequentially.
Chad Dillard: Well, thanks. Good afternoon. Just in light of the backlog growth, obviously we know from some of the press releases, descriptions of what your scope is on some of these projects, but just curious what some of the pass-through things are that are going through there. And maybe if you can give us maybe a sense of maybe looking at the profit increase in backlog might be more representative. I know you said 15% year-over-year. Curious if you can give us some measure of that sequentially.
Bob Pragada: Yeah. I'll go back to the sequential growth, profit, and backlog. But I'd say that, Steve, the majority of the pass-through is related to, as you know, in a data center, a tremendous amount of electrical equipment and equipment purchase that will be, and it was announced on who's going to be providing that equipment in modular form. So the interconnects and how that equipment is arriving to site in modular form would all be around the envelope of a pass-through. We would do the design and not just that, but also the balance of plant to house, as well as the interconnections of all the utilities. The trade contractors also end up making that pass-through too. And traditionally, we put a fee on both of those.
Bob Pragada: Yeah. I'll go back to the sequential growth, profit, and backlog. But I'd say that, Steve, the majority of the pass-through is related to, as you know, in a data center, a tremendous amount of electrical equipment and equipment purchase that will be, and it was announced on who's going to be providing that equipment in modular form. So the interconnects and how that equipment is arriving to site in modular form would all be around the envelope of a pass-through. We would do the design and not just that, but also the balance of plant to house, as well as the interconnections of all the utilities. The trade contractors also end up making that pass-through too. And traditionally, we put a fee on both of those.
Yeah, let me go. I'll go back to the sequential, uh, gross profit in in in backlog. But um, I'd say that see that the majority of uh the pass through uh is related to as you know, in a data center uh tremendous amount of electrical equipment and Equipment purchased uh that will be and it was announced on who's going to be providing uh that equipment in modular form.
Speaker #4: And maybe if you can give us a sense of looking at the profit increase in backlog—it might be more representative. I know you said 15% year over year.
Speaker #4: Curious if you can give us some measure of that.
Speaker #4: sequentially.
So um the interconnects and and how that equipment is arriving to sight in modular form would all be around the envelope of a pass through. Uh, we would do the design, uh, and not just that but also the the balance of plant uh, to house as well as the interconnections of all the utilities.
Speaker #5: Yeah. Let me go—I'll go back.
Bob Pragada: Yeah, let me go. I'll go back to the sequential gross profit in backlog. But, I'd say that, see, the majority of the pass-through is related to, as you know, in the data center, tremendous amount of electrical equipment and equipment purchase that will be. And it was announced on who's gonna be providing that equipment in modular form. So, the interconnects and how that equipment is arriving to site in modular form would all be around the envelope of a pass-through. We would do the design, and not just that, but also the balance of plant to house, as well as the interconnections of all the utilities.
Bob Pragada: Yeah, let me go. I'll go back to the sequential gross profit in backlog. But, I'd say that, see, the majority of the pass-through is related to, as you know, in the data center, tremendous amount of electrical equipment and equipment purchase that will be. And it was announced on who's gonna be providing that equipment in modular form. So, the interconnects and how that equipment is arriving to site in modular form would all be around the envelope of a pass-through. We would do the design, and not just that, but also the balance of plant to house, as well as the interconnections of all the utilities.
Speaker #5: To the sequential gross profit and backlog. But I'd say that, Steve, the majority of the pass-through is related to, as you know, in a data center, a tremendous amount of electrical equipment and equipment purchase.
The trade contractors also end up making uh, that pass through 2. And uh, in traditionally we put a fee on on both of those um, on the uh,
Speaker #5: That will be, and it was announced on who's going to be providing that equipment in modular form. So, the interconnects and how that equipment is arriving to site in modular form would all be around the envelope of a pass-through.
Bob Pragada: On the growth, profit sequentially growth, say it's high single digits sequentially, quarter-over-quarter, year-over-year, that 15% number is a strong number.
Bob Pragada: On the growth, profit sequentially growth, say it's high single digits sequentially, quarter-over-quarter, year-over-year, that 15% number is a strong number.
On the on the on the the growth profit sequentially growth say it's high, single digits sequentially quarter to quarter year on year. Uh that 15% number is a strong number.
Speaker #5: We would do the design, and not just that, but also the balance of plant to house, as well as the interconnections of all the utilities.
Sabahat Khan: Okay. Very helpful, Bob. And then just obviously, last quarter and last few months, there's been lots of discussions and follow-ups about AI. And I'm just curious if there's been any change to either what you've observed in your own business, anything that has developed, or your own thinking or message that you'd like to give on sort of the AI outlook and impact for the industry and the company.
Steven Fisher: Okay. Very helpful, Bob. And then just obviously, last quarter and last few months, there's been lots of discussions and follow-ups about AI. And I'm just curious if there's been any change to either what you've observed in your own business, anything that has developed, or your own thinking or message that you'd like to give on sort of the AI outlook and impact for the industry and the company.
Speaker #5: The trade contractors also end up making that pass-through too. And traditionally, we put a fee on both of those. On the gross profit sequentially, growth—say it's high single digits sequentially, quarter to quarter, year on year—that 15% number is a strong
Bob Pragada: The trade contractors also end up making that pass-through too, and traditionally, we put a fee on both of those. On the gross profit sequential growth, say it's high single digits sequentially, quarter-over-quarter. Year-over-year, that 15% number is a strong number.
Bob Pragada: The trade contractors also end up making that pass-through too, and traditionally, we put a fee on both of those. On the gross profit sequential growth, say it's high single digits sequentially, quarter-over-quarter. Year-over-year, that 15% number is a strong number.
Okay, very helpful Bob. And then just obviously, you know, last quarter in the last few months. There's been lots of discussion and follow-ups about, uh, Ai. And I'm just curious if there's been any change to, uh, either what you've observed in your own business, uh, any anything that has developed or your own thinking, or message that you'd like, to give on on, uh, sort of the, the AI Outlook and impact for the, the industry, and the company.
Bob Pragada: Yeah, absolutely, Steve. Nothing has changed. We felt strongly about AI before the November event that happened, and we feel equally and more strong about AI moving forward. It's kind of the main things we've been talking about, not just in Q1. I'm sorry, for the Q4 call in Q1 and that we've been talking about since 2019. We are getting great data advantage in what we do. Our datasets and our information continue to be strong, strong platforms for us to use for insights as well as build the models that we're building for our clients. It is helping, when I say it, digital enablement and AI with the scarcity of resources that we are continuing to face. We are growing headcount while we're using digital enablement to continue to grow at the same time as that scarcity.
Bob Pragada: Yeah, absolutely, Steve. Nothing has changed. We felt strongly about AI before the November event that happened, and we feel equally and more strong about AI moving forward. It's kind of the main things we've been talking about, not just in Q1. I'm sorry, for the Q4 call in Q1 and that we've been talking about since 2019. We are getting great data advantage in what we do. Our datasets and our information continue to be strong, strong platforms for us to use for insights as well as build the models that we're building for our clients. It is helping, when I say it, digital enablement and AI with the scarcity of resources that we are continuing to face. We are growing headcount while we're using digital enablement to continue to grow at the same time as that scarcity.
Speaker #5: number.
Speaker #4: Okay. Very
Steven Fisher: Okay, very helpful, Bob. And then just obviously, you know, last quarter and last few months, there's been lots of discussions and follow-ups about AI, and I'm just curious if there's been any change to either what you've observed in your own business, anything that has developed, or your own thinking, or message that you'd like to give on sort of the AI outlook and impact for the industry and the company.
Steven Fisher: Okay, very helpful, Bob. And then just obviously, you know, last quarter and last few months, there's been lots of discussions and follow-ups about AI, and I'm just curious if there's been any change to either what you've observed in your own business, anything that has developed, or your own thinking, or message that you'd like to give on sort of the AI outlook and impact for the industry and the company.
Speaker #4: helpful, Bob. And then just, obviously, last quarter, in the last few months, there's been lots of discussion and follow-ups about AI, and I'm just curious if there's been any change to either what you've observed in your own business, anything that has developed, or your own thinking or message that you'd like to give on sort of the AI outlook and impact for the industry and the
Speaker #4: company. Yeah, absolutely,
Bob Pragada: Yeah, absolutely, Steve. Nothing has changed. We felt strongly about AI before the November event that happened, and we feel equally and more strong about AI moving forward. Kinda the main things we've been talking about, not just in Q1. I'm sorry, for the Q4 call, in Q1, and that we've been talking about since, you know, 2019. We are getting great data advantage in what we do. Our data sets and our information are continue to be strong, strong platforms for us to use as for insights, as well as build the models that we're building for our clients. It is helping, when I say it, digital enablement and AI, with the scarcity of resources that we, we are continuing to face.
Bob Pragada: Yeah, absolutely, Steve. Nothing has changed. We felt strongly about AI before the November event that happened, and we feel equally and more strong about AI moving forward. Kinda the main things we've been talking about, not just in Q1. I'm sorry, for the Q4 call, in Q1, and that we've been talking about since, you know, 2019. We are getting great data advantage in what we do. Our data sets and our information are continue to be strong, strong platforms for us to use as for insights, as well as build the models that we're building for our clients. It is helping, when I say it, digital enablement and AI, with the scarcity of resources that we, we are continuing to face.
Speaker #5: Strongly about AI, Steve. Nothing has changed. We felt in November, before the event that happened, and we feel equally—and even more—strong about AI moving forward.
Speaker #5: Kind of the main things we've been talking about, not just in Q1, I'm sorry, for the Q4 call in Q1 and that we've been talking about since 2019.
About AI before, uh, the November, um, the November, uh, event that happened. And we feel equally and more strong about AI, moving forward. It's kind of the main things we've been talking about, not just in q1. I'm sorry. For the Q4, call in q1, uh, and that we've been talking about since, uh, you know, n 2019, we are getting great data advantage in. What we do our data sets and our information are continued to be strong strong, uh, platforms for us to use as for insights, as well as build the models that we're building for our clients. It is helping when I say it. Digital enablement. And AI with the scarcity of resources that we We are continuing to face. We are growing headcount. While we're using, uh, digital enablement to, uh, continue to grow at the same time of of as that scarcity. And I'd say the biggest piece is really been around.
Speaker #5: We are getting great data advantage in what we do. Our data sets and our information are continued to be as for insights as well as build the models that we're building for our it, digital enablement and clients.
Bob Pragada: I'd say the biggest piece has really been around what's happening in the AI ecosystem from chip manufacturing to power and water requirements all the way to the data center. We're playing across that continuum and seeing that well, we're seeing it in the numbers, right? Kind of the ultimate test of the power of AI is coming through in our bottom-line results.
Bob Pragada: I'd say the biggest piece has really been around what's happening in the AI ecosystem from chip manufacturing to power and water requirements all the way to the data center. We're playing across that continuum and seeing that well, we're seeing it in the numbers, right? Kind of the ultimate test of the power of AI is coming through in our bottom-line results.
Um, you know, what's happening in the AI ecosystem, from Chip manufacturing to power, and water requirements all the way to the data center. You know, we're playing a cross that Continuum and uh, and seeing that, uh, we well, we're seeing it in the numbers, right? So kind of the ultimate test of the power of AI is coming through in our bottom line results.
Terrific. Thanks Bob.
Speaker #5: face. We are growing headcount while we're using digital enablement to continue to grow It is helping when I say at the same time as that scarcity.
Bob Pragada: We are growing headcount while we're using digital enablement to continue to grow at the same time as that scarcity. And I'd say the biggest piece has really been around, you know, what's happening in the AI ecosystem, from chip manufacturing to power and water requirements, all the way to the data center. You know, we're playing across that continuum and seeing that, well, we're seeing it in the numbers, right? So kind of the ultimate test of the power of AI is coming through in our bottom line results.
Bob Pragada: We are growing headcount while we're using digital enablement to continue to grow at the same time as that scarcity. And I'd say the biggest piece has really been around, you know, what's happening in the AI ecosystem, from chip manufacturing to power and water requirements, all the way to the data center. You know, we're playing across that continuum and seeing that, well, we're seeing it in the numbers, right? So kind of the ultimate test of the power of AI is coming through in our bottom line results.
Your next question comes from the line of Adam bubs with Goldman Sachs. Please go ahead.
Sabahat Khan: Terrific. Thanks, Bob.
Steven Fisher: Terrific. Thanks, Bob.
Operator: Your next question comes from the line of Adam Bubes with Goldman Sachs. Please go ahead.
Operator: Your next question comes from the line of Adam Bubes with Goldman Sachs. Please go ahead.
Speaker #5: And I'd say the biggest piece has really been around what's happening in the AI ecosystem, from chip manufacturing to power and water requirements, all the way to the data center. We're playing across that continuum and seeing that—well, we're seeing it in the numbers, right?
Adam Bubes: Hi. Good afternoon. Maybe just one follow-up on the AI point. So you've been talking about AI machine learning for a couple of years now. And so just wondering if you could expand on to what extent AI machine learning is impacting projects and productivity today, and just how those conversations with clients have gone in terms of your ability to capture value from either improved productivity or high-grading your offerings.
Adam Bubes: Hi. Good afternoon. Maybe just one follow-up on the AI point. So you've been talking about AI machine learning for a couple of years now. And so just wondering if you could expand on to what extent AI machine learning is impacting projects and productivity today, and just how those conversations with clients have gone in terms of your ability to capture value from either improved productivity or high-grading your offerings.
Hi good afternoon uh maybe just 1 follow-up on the AI point so you you've been talking about AI machine learning for a couple years now. And so just wondering if you could expand on to what extent Ai and machine learning is impacting projects and productivity today and just how those conversations with clients have gone in terms of your ability to
Speaker #5: So kind of the ultimate test of the power of AI is coming through in our bottom line results.
capture value from, uh, either improved productivity or high-grade in your offerings.
Steven Fisher: Terrific. Thanks, Bob.
Steven Fisher: Terrific. Thanks, Bob.
Speaker #4: Bob. Terrific. Thanks,
Speaker #3: Your next
Operator: Your next question comes from the line of Adam Bubes with Goldman Sachs. Please go ahead.
Operator: Your next question comes from the line of Adam Bubes with Goldman Sachs. Please go ahead.
Speaker #3: Bubbs with Goldman Sachs. Please go
Bob Pragada: Yeah. So a couple of things. One, as far as how we're talking to our clients about it and how we are driving it as a value differentiator for our clients, if you think about the speed right now that we are going at, not just in the private sector, but also in the water market as well, and transportation, the schedules and the delivery model for these can't be done without the use of the AI platforms. And when I say AI, machine learning, the automation of tasks that we put into play. So it is driving backlog growth through differentiation in our award rates and the bookings. The other is that in the field, we're using some strong predictive analytics. It's a platform called Acuity in order to really get out in front of field-level issues that are coming up in real time.
Bob Pragada: Yeah. So a couple of things. One, as far as how we're talking to our clients about it and how we are driving it as a value differentiator for our clients, if you think about the speed right now that we are going at, not just in the private sector, but also in the water market as well, and transportation, the schedules and the delivery model for these can't be done without the use of the AI platforms. And when I say AI, machine learning, the automation of tasks that we put into play. So it is driving backlog growth through differentiation in our award rates and the bookings. The other is that in the field, we're using some strong predictive analytics. It's a platform called Acuity in order to really get out in front of field-level issues that are coming up in real time.
Speaker #3: ahead.
Speaker #6: Hi, good
Adam Bubes: Hi, good afternoon. Maybe just one follow-up on the AI point. So you, you've been talking about AI machine learning for a couple of years now, and so just wondering if you could expand on to what extent AI machine learning is impacting projects and productivity today, and just how those conversations with clients have gone in terms of your ability to capture value from, either improved productivity or high-grading your offerings.
Adam Bubes: Hi, good afternoon. Maybe just one follow-up on the AI point. So you, you've been talking about AI machine learning for a couple of years now, and so just wondering if you could expand on to what extent AI machine learning is impacting projects and productivity today, and just how those conversations with clients have gone in terms of your ability to capture value from, either improved productivity or high-grading your offerings.
Speaker #6: afternoon. Maybe just one follow-up on the AI point. So question comes from the line of Adam you've been talking about AI, machine learning for a couple of years now.
Speaker #6: And so, just wondering if you could expand on to what extent AI and machine learning is impacting projects and productivity today, and just how those conversations with clients have gone in terms of your ability to capture value from either improved productivity or high-grading your offerings.
Yeah. So a couple things 1 as far as how we're talking to our clients about it and how we are, um driving, it is a value differentiator for our clients. If you think about the speed right now that we are going at, especially not just in the private sector but also in the Water Market, as well and transportation. Um, we're the the schedules and the delivery model for these.
Speaker #5: Yeah. So a couple of things. One, as far as how we're talking to our clients about it and how we are driving it as a value if you think about the speed right now that we are going at, especially not just in the private sector, but also in the water market as well, and transportation, the schedules and the delivery model for these can't be done without the use of the AI platforms.
Bob Pragada: Yeah. So a couple things. One, as far as how we're talking to our clients about it and how we are driving it as a value differentiator for our clients, if you think about the speed right now that we are going at, especially not just in the private sector, but also in the water market, as well, and transportation, the schedules and the delivery model for these can't be done without the use of the AI platforms. And when I say AI, machine learning, the automation of tasks that we put into play. So it is driving backlog growth through differentiation in our award rates, in the bookings.
Bob Pragada: Yeah. So a couple things. One, as far as how we're talking to our clients about it and how we are driving it as a value differentiator for our clients, if you think about the speed right now that we are going at, especially not just in the private sector, but also in the water market, as well, and transportation, the schedules and the delivery model for these can't be done without the use of the AI platforms. And when I say AI, machine learning, the automation of tasks that we put into play. So it is driving backlog growth through differentiation in our award rates, in the bookings.
Can't be done without without the use of the AI platforms. And when I say AI, machine learning, uh, the the, um, the automation of tasks that that we put into play. So, it is driving backlog growth through differentiation in us, in our, in our award rates, and and the bookings
Speaker #5: And when I say AI, machine learning, the automation of tasks that we put into play. So it is driving backlog growth through differentiation in us in our award rates and the bookings.
Bob Pragada: And that's been a real game changer for us. We've got Acuity deployed across all of our end markets in the field program management work that we do. And then the last thing, and we've talked about this several times, but we're seeing more, we use Replica as our digital twinning. But now digital twinning, not just in the water sector, but now in the manufacturing sector and the data center sector, is allowing for us to get to the data insights in the simulation technologies well, with the simulation technologies, in a much faster rate in order to solve for some really, really complex issues that we're solving for our clients. So overall, it's coming through. We've got a whole slew and suite of platforms that we're using.
Bob Pragada: And that's been a real game changer for us. We've got Acuity deployed across all of our end markets in the field program management work that we do. And then the last thing, and we've talked about this several times, but we're seeing more, we use Replica as our digital twinning. But now digital twinning, not just in the water sector, but now in the manufacturing sector and the data center sector, is allowing for us to get to the data insights in the simulation technologies well, with the simulation technologies, in a much faster rate in order to solve for some really, really complex issues that we're solving for our clients. So overall, it's coming through. We've got a whole slew and suite of platforms that we're using.
Speaker #5: The other is that in the field, we're using some strong predictive analytics to platform called Acuity. In order to really get out in front of field-level issues that are coming up in real time.
Bob Pragada: The other is that in the field, we're using some strong predictive analytics, it's a platform called Acuity, in order to, to, to really get out in front of field-level issues that are coming up in real time. And, and that's. That's been a real game changer for us. We've got Acuity deployed across all of our end markets in the field program management work that we do. And then the last thing, and we've talked about this several times, but we're seeing more, you know, we use Replica as our digital twinning.
Bob Pragada: The other is that in the field, we're using some strong predictive analytics, it's a platform called Acuity, in order to, to, to really get out in front of field-level issues that are coming up in real time. And, and that's. That's been a real game changer for us. We've got Acuity deployed across all of our end markets in the field program management work that we do. And then the last thing, and we've talked about this several times, but we're seeing more, you know, we use Replica as our digital twinning.
The other is that in the field, we're using some, uh, some strong Predictive Analytics. Uh, it's a platform called Acuity, uh, in order to, to, to really get out in front of field level, uh, issues that are coming up in real time. And, uh, and that's that's been a real game-changer for us. Uh, we've got Acuity deployed across all of our end markets and in the field program management work that we do. And then the last thing and we've talked about this several times, but we're seeing more, you know, we use replicas our digital twinning but now digital twinning, not just in the water sector. But now in the manufacturing sector and the data center sector is allowing for us to get to the Data Insights in the simulation Technologies. Uh, well with the simulation Technologies in a much faster rate in order to solve for some really, really complex, uh, issues that we're solving for for our clients. So overall, it's it's coming through. We've got a whole slew and sweet platforms that we're using.
Speaker #5: And that’s been a real game changer for us. We’ve got Acuity deployed across all of our end markets in the field program management work that we do.
Speaker #5: And then the last thing and we've talked about this several times, but we're seeing more we use Replika as our digital twinning but now digital twinning not just in the water sector, but now in the manufacturing sector and the data center sector is allowing for us to get to the data insights in the simulation technologies well, with the simulation technologies in a much faster rate in order to solve for some really, really complex issues that we're solving for our clients.
Adam Bubes: And then really strong PA Consulting margin performance, I think 24% this quarter. Any outsized benefit to call out there, or what's the right way to think about sustainability of those margins in the balance of the year?
Adam Bubes: And then really strong PA Consulting margin performance, I think 24% this quarter. Any outsized benefit to call out there, or what's the right way to think about sustainability of those margins in the balance of the year?
And then uh, really strong PA Consulting margin performance. I think 24% this quarter any um outside benefits to call out there or what's the right way to think about um sustainability of those margins and the balance of the year.
Bob Pragada: But now digital twinning, not just in the water sector, but now in the manufacturing sector and the data center sector, is allowing for us to get to the data insights and the simulation technologies, well, with the simulation technologies in a much faster rate in order to solve for some really, really complex issues that we're solving for, for our clients. So overall, it's, it's coming through. We've got a whole slew and suite of platforms that we're using.
Bob Pragada: But now digital twinning, not just in the water sector, but now in the manufacturing sector and the data center sector, is allowing for us to get to the data insights and the simulation technologies, well, with the simulation technologies in a much faster rate in order to solve for some really, really complex issues that we're solving for, for our clients. So overall, it's, it's coming through. We've got a whole slew and suite of platforms that we're using.
Venk Nathamuni: Yeah, Adam, great questions. I would say, yeah, as you point out, really strong performance. Most of it is driven by the fact that there's a solid top-line beat, and we had some operating leverage there as well. What we have stated all along is that we want to balance really high single-digits growth for PA with margins that are, as you know, already industry best. So a 22% margin is kind of the way we think about the long-term model there. And we want to make sure that we have a good balance between high revenue growth and high industry-leading margins. So the way to model your PA margins going forward is about 22%. But clearly, we had a really strong performance there in the just concluded quarter.
Venk Nathamuni: Yeah, Adam, great questions. I would say, yeah, as you point out, really strong performance. Most of it is driven by the fact that there's a solid top-line beat, and we had some operating leverage there as well. What we have stated all along is that we want to balance really high single-digits growth for PA with margins that are, as you know, already industry best. So a 22% margin is kind of the way we think about the long-term model there. And we want to make sure that we have a good balance between high revenue growth and high industry-leading margins. So the way to model your PA margins going forward is about 22%. But clearly, we had a really strong performance there in the just concluded quarter.
Speaker #5: So overall, it's coming through. We've got a whole slew and suite of platforms that we're using.
Speaker #6: And then really strong PA Consulting margin performance—I think 24% this quarter. Any outsized benefit to call out there, or what's the right way to think about sustainability of those margins and the balance of—
Andrew Wittmann: And then really strong PA Consulting margin performance, I think 24% this quarter. Any outsized benefit to call out there, or what's the right way to think about sustainability of those margins in the balance of the year?
Steven Fisher: And then really strong PA Consulting margin performance, I think 24% this quarter. Any outsized benefit to call out there, or what's the right way to think about sustainability of those margins in the balance of the year?
Yeah, Adam great questions I would say. Yeah, as you point out, really strong performance know, most of it is driven by the fact that, you know, there's a solid Topline beat, and we had some operating leverage there as well. Uh, what we have stated all along, is that we want to balance, you know, really high, single digits growth for PA with margins that are, as you know, already, uh, you know, industry best. So 22% margin is kind of the way we think about as a long-term model there and we want to make sure that we have a good balance between High Revenue growth and and high industry-leading margins. So uh, so the way to model your PA margins, going forward is about 22%. But clearly we had a really strong uh, performance there in uh in the just concluded quarter.
Great. Thanks so much.
Speaker #5: Yeah, Adam, great questions. I would say, yeah, as you point out, really strong performance most of it is driven by the fact that there's solid top-line beat, and we had some operating leverage there as well.
Venkatesh Nathamuni: Yeah, Adam, great question. So I would say, yeah, as you point out, really strong performance. Most of it is driven by the fact that, you know, there's a solid top-line beat, and we had some operating leverage there as well. What we have stated all along is that we wanna balance, you know, really high single-digits growth for PA with margins that are, as you know, already, you know, industry best. So a 22% margin is kind of the way we think about as a long-term model there, and we wanna make sure that we have a good balance between high revenue growth and, and high industry-leading margins. So, so the way to model PA margins going forward is about 22%. But, clearly, we had a really strong performance there in, in the just concluded quarter.
Venkatesh Nathamuni: Yeah, Adam, great question. So I would say, yeah, as you point out, really strong performance. Most of it is driven by the fact that, you know, there's a solid top-line beat, and we had some operating leverage there as well. What we have stated all along is that we wanna balance, you know, really high single-digits growth for PA with margins that are, as you know, already, you know, industry best. So a 22% margin is kind of the way we think about as a long-term model there, and we wanna make sure that we have a good balance between high revenue growth and, and high industry-leading margins. So, so the way to model PA margins going forward is about 22%. But, clearly, we had a really strong performance there in, in the just concluded quarter.
Adam Bubes: Great. Thanks so much.
Adam Bubes: Great. Thanks so much.
Venk Nathamuni: You're welcome.
Venk Nathamuni: You're welcome.
Speaker #5: What we have for PA, with margins that are, as you know, balanced – really high single-digit growth, already industry best. So 22% margin is kind of the way we think about the long-term model there, and we want to make sure that we have a good balance between high revenue growth and high, industry-leading margins.
Operator: Your next question comes from the line of Jamie Cook with Truist Securities. Please go ahead.
Operator: Your next question comes from the line of Jamie Cook with Truist Securities. Please go ahead.
Jamie Cook: Hi. Congratulations on a nice quarter. I guess, sorry, Bob, another question on AI. Just as you sit here today and think about AI and the opportunity for Jacobs both on the revenue on the margin side, how do you balance the two? Do you know what I mean? I mean, over time, if you had to pick one versus the other, do you think there's an opportunity to grow the top line at a quicker rate and perhaps operating profit more so versus the margin? Just sort of how you're thinking about that balance as AI impacts your business model. I guess it's my first question, and then I'll ask another one after that.
Jamie Cook: Hi. Congratulations on a nice quarter. I guess, sorry, Bob, another question on AI. Just as you sit here today and think about AI and the opportunity for Jacobs both on the revenue on the margin side, how do you balance the two? Do you know what I mean? I mean, over time, if you had to pick one versus the other, do you think there's an opportunity to grow the top line at a quicker rate and perhaps operating profit more so versus the margin? Just sort of how you're thinking about that balance as AI impacts your business model. I guess it's my first question, and then I'll ask another one after that.
Speaker #5: So the way to model your PA margins going forward is about 22%, but clearly, we had a really strong performance there in the just-concluded quarter.
Speaker #6: Great. Thanks so much.
Andrew Wittmann: Great. Thanks so much.
Adam Bubes: Great. Thanks so much.
Venkatesh Nathamuni: Welcome.
Venkatesh Nathamuni: Welcome.
Speaker #3: Your next question comes from the 'You're welcome' line of Jamie Cook with Truist Securities. Please go ahead.
Operator: Your next question comes from the line of Jamie Cook with Truist Securities. Please go ahead.
Operator: Your next question comes from the line of Jamie Cook with Truist Securities. Please go ahead.
Hi, uh, congratulations on a nice quarter. Um, I guess. Sorry, Bob another question on AI. Just as as you sit here today and think about Ai and the opportunity for Jacobs. Both on the, you know, revenue on the margin side. How do you balance the 2? Do you know what I mean? I mean, over time you if if you had to pick 1 versus the other, do you think there's an opportunity to grow the top line at a quicker rate? Um and perhaps operating profit more, so versus the margin just sort of how you're thinking about that balance. Um as AI uh impacts your business model, I guess it's my first question and then I'll then I'll ask another 1 after that. Okay, great. Um,
Speaker #7: Hi. Congratulations on a nice quarter. I guess, sorry, Bob, another question on AI: Just as you sit here today and think about AI and the opportunity for Jacobs, both on the revenue and the margin side.
Jamie Cook: Hi, congratulations on a nice quarter. I guess, sorry, Bob, another question on AI. Just as you sit here today and think about AI and the opportunity for Jacobs, both on the, you know, revenue on the margin side, how do you balance the two? Do you know what I mean? I mean, over time, you, if you had to pick one versus the other, do you think there's an opportunity to grow the top line at a quicker rate, and perhaps operating profit more so versus the margin, just sort of how you're thinking about that balance, as AI impacts your business model? I guess it's my first question, and then I'll ask another one after that.
Jamie Cook: Hi, congratulations on a nice quarter. I guess, sorry, Bob, another question on AI. Just as you sit here today and think about AI and the opportunity for Jacobs, both on the, you know, revenue on the margin side, how do you balance the two? Do you know what I mean? I mean, over time, you, if you had to pick one versus the other, do you think there's an opportunity to grow the top line at a quicker rate, and perhaps operating profit more so versus the margin, just sort of how you're thinking about that balance, as AI impacts your business model? I guess it's my first question, and then I'll ask another one after that.
Bob Pragada: Okay. Great. Jamie, if the world was plentiful with qualified resources for all the work that's out there from filling the denominator of the TAMs that we play in, I think that we would probably be making choices between top line and bottom line. We're not. We are in a resource-constrained market that AI is enabling us to grow the top line while we're operating in a resource-constrained environment and driving efficiencies in type of solution that we're delivering to our clients. So not a choice as well as not a pivot. We feel like we're well positioned to do both.
Bob Pragada: Okay. Great. Jamie, if the world was plentiful with qualified resources for all the work that's out there from filling the denominator of the TAMs that we play in, I think that we would probably be making choices between top line and bottom line. We're not. We are in a resource-constrained market that AI is enabling us to grow the top line while we're operating in a resource-constrained environment and driving efficiencies in type of solution that we're delivering to our clients. So not a choice as well as not a pivot. We feel like we're well positioned to do both.
Speaker #7: How do you balance the two? Do you know what I mean? I mean, over time, if you had to pick one versus the other, do you think there's an opportunity to grow the top line at a quicker rate and perhaps operating profit more so versus the margin just sort of how you're thinking about that balance as AI impacts your business model?
Speaker #7: question, and then I'll ask another
Speaker #7: one after that. I guess it's my first
Speaker #5: Okay.
Bob Pragada: Okay, great. Jamie, if the world was plentiful with qualified resources for all the work that's out there from, you know, filling the denominator of the TAMs that we play in, I think that, you know, we would probably be making choices between top line and bottom line. We're not. We are in a resource-constrained market that AI is enabling us to grow the top line while we're operating with, you know, in a resource-constrained environment and driving efficiencies in type of solution that we're delivering to our clients. So not a choice as well as not a pivot. We feel like we're well positioned to do both.
Bob Pragada: Okay, great. Jamie, if the world was plentiful with qualified resources for all the work that's out there from, you know, filling the denominator of the TAMs that we play in, I think that, you know, we would probably be making choices between top line and bottom line. We're not. We are in a resource-constrained market that AI is enabling us to grow the top line while we're operating with, you know, in a resource-constrained environment and driving efficiencies in type of solution that we're delivering to our clients. So not a choice as well as not a pivot. We feel like we're well positioned to do both.
Speaker #5: Great. Jamie, if the world was plentiful with qualified resources, for all the work that's out there, from filling the denominator of the TAMs that we play in, I think that we would probably be making choices between top line and bottom line.
Jamie if if if the if the world was was plentiful with uh with qualified resources for all the work that's out there from, you know, filling the denominator of the Tams that that we play in. I think that uh you know we would probably be making choices between re between Top Line and bottom line. We're not we we are in a in a resource constraint Market that, uh, that AI is enabling us to grow the Top Line. While we're operating with, uh, you know, in a resource constraint environment and driving efficiencies in type of solution that we're delivering to our clients. So, not a, not a, not a, not a choice as well as not a pivot. Uh, we, we feel like we're, we're well positioned to do both.
Jamie Cook: Okay. Thank you. And then I guess then just on the margin performance in I&AF in the back half of the year, obviously, we're expecting some margin improvement to achieve, besides PA Consulting, strong margins to help get to your full-year adjusted EBITDA margin forecast. Just what's driving that? Is it more mix? Is it self-help? Just trying to understand what's driving the margin improvement in I&AF in the back half of the year. Thank you.
Jamie Cook: Okay. Thank you. And then I guess then just on the margin performance in I&AF in the back half of the year, obviously, we're expecting some margin improvement to achieve, besides PA Consulting, strong margins to help get to your full-year adjusted EBITDA margin forecast. Just what's driving that? Is it more mix? Is it self-help? Just trying to understand what's driving the margin improvement in I&AF in the back half of the year. Thank you.
Speaker #5: We're not in a resource-constrained environment. We market that AI is enabling us to grow the top line while we're operating within a resource-constrained environment and driving efficiencies in the type of solution that we're delivering to our clients.
Okay. Thank you. And then I guess then just on the margin performance um in inaf in in the back half of the year um obviously we're expecting some some margin Improvement to achieve, you know, besides PA Consulting, strong margins to help, get to your full year adjusted even that margin uh forecast. Um, just what what's driving that um is it more mixed? Is it self-help? Just trying to understand what's driving the margin Improvement. Um, in in af in the, in the back half of the Year, thank you.
Speaker #5: So not a choice as well as not a pivot. We feel like we're well-positioned to do
Venk Nathamuni: Yeah. Jamie, thanks for your question, and thanks for your comments as well about the quarter. I'd say lots of really positive trends for us from a margin perspective. Obviously, Q1, we came in at 13.4%. And Q2, we're guiding for a 50 basis point sequential improvement. And then we see a linear progression in Q3 and Q4. So a few things that drive that margin expansion for us. Number one, continued operating leverage. So we're going to maintain the discipline in terms of ensuring that our OPEX grows at a slower pace than revenue growth. And then clearly, from the standpoint of some of the gross margin drivers that we talked about at Invest today with the way we expect our global delivery to step up, which is already happening, and we see more of that coming in Q2, Q3, and Q4.
Venk Nathamuni: Yeah. Jamie, thanks for your question, and thanks for your comments as well about the quarter. I'd say lots of really positive trends for us from a margin perspective. Obviously, Q1, we came in at 13.4%. And Q2, we're guiding for a 50 basis point sequential improvement. And then we see a linear progression in Q3 and Q4. So a few things that drive that margin expansion for us. Number one, continued operating leverage. So we're going to maintain the discipline in terms of ensuring that our OPEX grows at a slower pace than revenue growth. And then clearly, from the standpoint of some of the gross margin drivers that we talked about at Invest today with the way we expect our global delivery to step up, which is already happening, and we see more of that coming in Q2, Q3, and Q4.
Speaker #5: both.
Speaker #7: Okay. Thank you. And then I guess then just on the margin performance in INAF in the back half of the year, obviously, we're expecting some margin improvement to achieve besides PA consulting strong margins to help get to your full year adjusted even margin.
Jamie Cook: Okay, thank you. And then I guess, Venk, just on the margin performance in I&AF in the back half of the year, obviously, we're expecting some margin improvement to achieve, you know, besides PA Consulting, strong margins to help get to your full year Adjusted EBITDA margin forecast. Just what, what's driving that? Is it more mix? Is it self-help? Just trying to understand what's driving the margin improvement in I&AF in the back half of the year. Thank you.
Jamie Cook: Okay, thank you. And then I guess, Venk, just on the margin performance in I&AF in the back half of the year, obviously, we're expecting some margin improvement to achieve, you know, besides PA Consulting, strong margins to help get to your full year Adjusted EBITDA margin forecast. Just what, what's driving that? Is it more mix? Is it self-help? Just trying to understand what's driving the margin improvement in I&AF in the back half of the year. Thank you.
Speaker #7: Forecast, just what's driving that? Is it more mixed? Is it self-help? Just trying to understand what's driving the margin improvement in INAF in the back half of the year.
Speaker #7: Thank you.
Speaker #5: Yeah, Jamie, thanks for your question, and thanks for your comments as well about the quarter. I'd say lots of really positive trends for us from a margin perspective.
Venkatesh Nathamuni: Yeah, Jamie, thanks for your question, and thanks for your comments as well about the quarter. I'd say, you know, lots of really positive trends for us from a margin perspective. You know, obviously, Q1, you know, we came in at 13.4%. And Q2, we're guiding for a 50 basis point sequential improvement, and then we see a linear progression in Q3 and Q4. So a few things, you know, that drive that margin expansion for us. Number one, you know, continued operating leverage. So we're gonna maintain the discipline in terms of ensuring that our OpEx grows at a slower pace than revenue growth.
Venkatesh Nathamuni: Yeah, Jamie, thanks for your question, and thanks for your comments as well about the quarter. I'd say, you know, lots of really positive trends for us from a margin perspective. You know, obviously, Q1, you know, we came in at 13.4%. And Q2, we're guiding for a 50 basis point sequential improvement, and then we see a linear progression in Q3 and Q4. So a few things, you know, that drive that margin expansion for us. Number one, you know, continued operating leverage. So we're gonna maintain the discipline in terms of ensuring that our OpEx grows at a slower pace than revenue growth.
Speaker #5: Obviously, Q1, we came in at 13.4%. And Q2, we're guiding for a 50 basis point sequential improvement. And then we see a linear progression in Q3 and Q4.
Venk Nathamuni: And then also on the commercial model side, right? So to the extent that we are engaging more with some of the life sciences and advanced manufacturing clients, that also helps from the standpoint of driving those commercial models. So I would say it's not one thing. It's a combination of several things that we talked about at Invest today, more of that coming to fruition in Q2, Q3, and Q4. And we feel really good about our margin performance for the full year. Obviously, just for context, in fiscal 2025, we grew our margins by 110 basis points, and we're guiding for a range of 50 to 80 basis points increase in fiscal 2026.
Venk Nathamuni: And then also on the commercial model side, right? So to the extent that we are engaging more with some of the life sciences and advanced manufacturing clients, that also helps from the standpoint of driving those commercial models. So I would say it's not one thing. It's a combination of several things that we talked about at Invest today, more of that coming to fruition in Q2, Q3, and Q4. And we feel really good about our margin performance for the full year. Obviously, just for context, in fiscal 2025, we grew our margins by 110 basis points, and we're guiding for a range of 50 to 80 basis points increase in fiscal 2026.
Yeah, Jamie, thanks for your question, and thanks for your comments as well about the quarter. I'd say, you know, lots of really positive trends for us from a margin perspective. You know, obviously q1, you know, we came in uh, at 13.4% uh, and Q2 were guiding for a 50 basis, point sequential Improvement and then we see a linear progression in Q3 and Q4. So a few things I know that drive that margin expansion for us. Number 1, you know, continued operating leverage. So we're going to maintain the discipline in terms of ensuring that our Opex grows at a slower pace and revenue growth. Uh, and then, you know, clearly from the standpoint of some of the gross margin drivers that we talked about at investor day with the way. We expect our Global delivery to, to step up, which is all already happening. And we see more of that coming in Q2 Q3 and Q4. Uh, and then also on the commercial model side, right? So, with the extent to the extent that we are engaging more with some of the life sciences and advanced manufacturing clients that also helps uh, you know, from the standpoint of driving those commercial models. So I would say it's not 1 thing, it's a combination of uh,
Speaker #5: So a few things that drive that margin expansion for us. Number one, continued operating leverage. So we're going to maintain the discipline in terms of ensuring that our OPEX grows at a slower pace than revenue growth.
Speaker #5: And then clearly, from the standpoint of some of the gross margin drivers that we talked about at invest today, with the way we expect our global delivery to step up, which is already happening, and we see more of that coming in Q2, Q3, and Q4.
Venkatesh Nathamuni: And then, you know, clearly from the standpoint of some of the gross margin drivers that we talked about at Investor Day, with the way we expect our global delivery to step up, which is already happening, and we see more of that coming in Q2, Q3, and Q4. And then also on the commercial model side, right? So to the extent that we are engaging more with some of the life sciences and advanced manufacturing clients, that also helps, you know, from the standpoint of driving those commercial models. So I'd say it's not one thing. It's a combination of several things that we talked about at Investor Day. More of that coming to fruition in Q2, Q3, and Q4, and we feel really good about our margin performance for the full year.
Venkatesh Nathamuni: And then, you know, clearly from the standpoint of some of the gross margin drivers that we talked about at Investor Day, with the way we expect our global delivery to step up, which is already happening, and we see more of that coming in Q2, Q3, and Q4. And then also on the commercial model side, right? So to the extent that we are engaging more with some of the life sciences and advanced manufacturing clients, that also helps, you know, from the standpoint of driving those commercial models. So I'd say it's not one thing. It's a combination of several things that we talked about at Investor Day. More of that coming to fruition in Q2, Q3, and Q4, and we feel really good about our margin performance for the full year.
Speaker #5: And then, also on the commercial model side, right? So, to the extent that we are engaging more with some of the life sciences and advanced manufacturing clients, that also helps from the standpoint of driving those commercial models.
Bob Pragada: Maybe one add to that is that in the second half is really where we're starting to see the advanced facilities or some of these bookings that we have from a mixed perspective have contribution to that linear progression in our margins and confidence.
Bob Pragada: Maybe one add to that is that in the second half is really where we're starting to see the advanced facilities or some of these bookings that we have from a mixed perspective have contribution to that linear progression in our margins and confidence.
Several things that we talked about invest today, more of that coming to fruition in, in Q2 Q3 and Q4. And we feel really good about our margin performance for the full year. Obviously, you know, just for context. In in physical 25, we grew our margins, by 110 basis points, and regarding for a range of 50 to 80 basis points, increase in fiscal, 26, maybe 1 add to that uh, is that in the second half is really where we're starting to see the the advanced facilities or some of these these bookings that we have from a mixed perspective. Uh have contribution to that linear progression and our margins and confidence.
Speaker #5: So I would say it's not one thing. It's a combination of several things that we talked about at Invest today. More of that coming to fruition in Q2, Q3, and Q4.
You. Our next question comes from the line of Andy Whitman with beard. Please go ahead.
Jamie Cook: Thank you. That's very helpful.
Jamie Cook: Thank you. That's very helpful.
Speaker #5: And we feel really good about our margin performance for the full year. Obviously, just for context, in fiscal '25, we grew our margins by 110 basis points.
Operator: Your next question comes from the line of Andy Whitman with Baird. Please go ahead.
Operator: Your next question comes from the line of Andy Whitman with Baird. Please go ahead.
Venkatesh Nathamuni: Obviously, you know, just for context, in fiscal 25, we grew our margins by 110 basis points, and we're guiding for a range of 50 to 80 basis points increase in fiscal 26.
Venkatesh Nathamuni: Obviously, you know, just for context, in fiscal 25, we grew our margins by 110 basis points, and we're guiding for a range of 50 to 80 basis points increase in fiscal 26.
Andy Whitman: Oh, great. Thanks for taking my questions, guys. I wanted to ask about this very good backlog, very exciting, obviously, in some of these really marquee projects. Bob, I thought maybe given that there's a little bit more mix here to some of this EPCM scope, I'd want to ask about how you're managing the risk criteria here. Are these contracts? Are you basically able to offload any risk to the subcontractors that you are managing on this, or do you bear any? I'm just wondering because obviously, some of these projects are pretty significant, and percent changes on large numbers can actually kind of matter in the future. So maybe I'll let you address that, please.
Andrew Wittmann: Oh, great. Thanks for taking my questions, guys. I wanted to ask about this very good backlog, very exciting, obviously, in some of these really marquee projects. Bob, I thought maybe given that there's a little bit more mix here to some of this EPCM scope, I'd want to ask about how you're managing the risk criteria here. Are these contracts? Are you basically able to offload any risk to the subcontractors that you are managing on this, or do you bear any? I'm just wondering because obviously, some of these projects are pretty significant, and percent changes on large numbers can actually kind of matter in the future. So maybe I'll let you address that, please.
Speaker #5: And we're guiding for a range of 50 to 80 basis points increase in
Speaker #5: fiscal '26. Maybe one
Bob Pragada: Maybe one add to that is that in the second half is really where we're starting to see the, the advanced facilities or some of these, these bookings that we have from a mix perspective have kind of contribution to that linear progression in our margins and confidence.
Bob Pragada: Maybe one add to that is that in the second half is really where we're starting to see the, the advanced facilities or some of these, these bookings that we have from a mix perspective have kind of contribution to that linear progression in our margins and confidence.
Speaker #6: Add to that is that in the second half is really where we're starting to see the advanced facilities or some of these bookings that we have from a mixed perspective.
Speaker #6: We have contribution to that linear progression, and our margins, and confidence.
Jamie Cook: Thank you. That's very helpful.
Jamie Cook: Thank you. That's very helpful.
Speaker #7: helpful.
Speaker #3: Your next question comes from the line of Andy Whitman with Baird. Please go ahead.
Operator: Your next question comes from the line of Andrew Wittmann with Baird. Please go ahead.
Operator: Your next question comes from the line of Andrew Wittmann with Baird. Please go ahead.
Oh great. Thanks for taking my questions, guys, I wanted to ask about this very good backlog, very exciting. Obviously we have some of these really Marquee projects about I thought maybe given that. Um that there's a little bit more mix here to some of this epcm scope. Uh I I want to ask about how you're how you're managing the the risk criteria. Here are these contracts are you basically able to offload uh any risk to these to the subcontractors uh that you are managing on this or or do you bear any? I'm just wondering because obviously some of these projects are pretty significant and uh, you know, percent changes on on large, numbers can actually kind of matter in the future. So but maybe I'll let you address that please.
Speaker #3: ahead. Oh,
Speaker #5: great. Thanks for taking my questions, guys. I wanted to ask about this very good Thank you.
Andrew Wittmann: Oh, great! Thanks for taking my questions, guys. I wanted to ask about this very good backlog. Very exciting. Obviously, we had some of these really marquee projects. Bob, I thought maybe given that that there's a little bit more mix here to some of this EPCM scope, I'd wanna ask about how you're managing the risk criteria here. Are these contracts-- Are you basically able to offload any risk to these to the subcontractors that you are managing on this, or do you bear any? I'm just wondering, because obviously some of these projects are pretty significant and, you know, percent changes on large numbers can actually kind of matter in the future. So, maybe I'll let you address that, please.
Andrew Wittmann: Oh, great! Thanks for taking my questions, guys. I wanted to ask about this very good backlog. Very exciting. Obviously, we had some of these really marquee projects. Bob, I thought maybe given that that there's a little bit more mix here to some of this EPCM scope, I'd wanna ask about how you're managing the risk criteria here. Are these contracts-- Are you basically able to offload any risk to these to the subcontractors that you are managing on this, or do you bear any? I'm just wondering, because obviously some of these projects are pretty significant and, you know, percent changes on large numbers can actually kind of matter in the future. So, maybe I'll let you address that, please.
Speaker #5: backlog, very exciting. Obviously, we had some of these really marquee projects. Bob, I thought maybe given that there's a little bit more mix here to some That's very of this EPCM scope, I'd want to ask about how you're managing the risk criteria here?
Bob Pragada: Yeah, absolutely. So our risk profile, Andy, has not changed. And so the same EPCM delivery model that we've been very focused in on for the balance of 20 years in life sciences, we do a lot in the water sector as well. Those are the same risk profiles we're taking now. And as you know, we've been pretty consistent on how we flow those to our supply chain. So the awards that we're getting right now, we have not inflected to a different risk profile. We're utilizing the same risk profile we have for the balance of the 20 years in those sectors.
Bob Pragada: Yeah, absolutely. So our risk profile, Andy, has not changed. And so the same EPCM delivery model that we've been very focused in on for the balance of 20 years in life sciences, we do a lot in the water sector as well. Those are the same risk profiles we're taking now. And as you know, we've been pretty consistent on how we flow those to our supply chain. So the awards that we're getting right now, we have not inflected to a different risk profile. We're utilizing the same risk profile we have for the balance of the 20 years in those sectors.
Speaker #5: Are these contracts—are you basically able to offload any risk to the subcontractors that you are managing on this, or do you bear any?
Speaker #5: I'm just wondering, because obviously some of these projects are pretty significant, and percent changes on large numbers can actually kind of matter in the future.
To a different risk profile. We're utilizing the same risk profile. We have for the balance of the 20 years in those sectors.
Speaker #5: So maybe I'll let you
Speaker #6: Yeah.
Speaker #6: Absolutely. So our risk profile, Andy, has not changed. address that, please. And so the same EPCM delivery model that we've been very focused in on for the balance of 20 years in life sciences, we do a lot in the water sector as well.
Bob Pragada: ... Yeah, absolutely. So our risk profile, Andy, has not changed. And so the same EPCM delivery model that we, you know, that we've been very focused in on for the balance of 20 years in life sciences, we do a lot in the water sector as well. Those are the same risk profiles we're taking now, and as you know, we've been pretty consistent on how we flow those to our supply chain. So the awards that we're getting right now, we have not inflected to a different risk profile. We're utilizing the same risk profile we have for the balance of 20 years in those sectors.
Bob Pragada: Yeah, absolutely. So our risk profile, Andy, has not changed. And so the same EPCM delivery model that we, you know, that we've been very focused in on for the balance of 20 years in life sciences, we do a lot in the water sector as well. Those are the same risk profiles we're taking now, and as you know, we've been pretty consistent on how we flow those to our supply chain. So the awards that we're getting right now, we have not inflected to a different risk profile. We're utilizing the same risk profile we have for the balance of 20 years in those sectors.
Andy Whitman: Okay. Great. And then I just wanted to get a clarification on PA and the capital deployment that went along with that as well. It's obviously a large capital deployment. So when I was looking at the press release, the EBITDA increase that you're getting from PA is because PA is already consolidated, and the EBITDA that you're picking up is really only the reduction of the non-controlling interest. Obviously, non-controlling interest is after tax. So you'd have to gross that $52.3 million up to a larger number. But even when you do that, against a $1.6 billion capital outlay, the math that I get here from the multiple is substantially larger than the 13x. And so I know there's some kind of different accounting, GAAP accounting that's maybe around this.
Andrew Wittmann: Okay. Great. And then I just wanted to get a clarification on PA and the capital deployment that went along with that as well. It's obviously a large capital deployment. So when I was looking at the press release, the EBITDA increase that you're getting from PA is because PA is already consolidated, and the EBITDA that you're picking up is really only the reduction of the non-controlling interest. Obviously, non-controlling interest is after tax. So you'd have to gross that $52.3 million up to a larger number. But even when you do that, against a $1.6 billion capital outlay, the math that I get here from the multiple is substantially larger than the 13x. And so I know there's some kind of different accounting, GAAP accounting that's maybe around this.
Okay, great. And then I just wanted to get a clarification on um PA and and the capital deployment that go went along with that as well. Um, you know, it's obviously a large Capital deployment. So what I was looking at the press release,
Speaker #6: Same risk profiles we're taking now. Those are the—and as you know, we've been pretty consistent on how we flow those to our supply chain.
Speaker #6: So the awards that we're getting right now, we have not inflected to a different risk profile. We're utilizing the same risk profile we have for the balance of the 20 years.
the Evita increase that you're getting from PA is because pause already Consolidated. Your the Evita that you're picking up is is really only the reduction of the, of the non-controlling interest obviously, not controlling, this is after tax. You'd have to, you'd have to gross that 52.3 million up to to a larger number. But but even when you do that against the 1.6 billion dollar uh capital outlay.
Speaker #6: In those sectors.
Speaker #5: Great. And then I just wanted to get a clarification on Okay. PA in the capital deployment that go went along with that as well.
Andrew Wittmann: Okay, great. And then I just wanted to get a clarification on PA and the capital deployment that went along with that as well. You know, it's obviously a large capital deployment. So when I was looking at the press release, the EBITDA increase that you're getting from PA is because PA is already consolidated. The EBITDA that you're picking up is really only the reduction of the non-controlling interest. Obviously, non-controlling interest is after tax. You'd have to gross that $52.3 million up to a larger number. But even when you do that, against a $1.6 billion capital outlay, the math that I get here for the multiple is substantially larger than the 13 times.
Andrew Wittmann: Okay, great. And then I just wanted to get a clarification on PA and the capital deployment that went along with that as well. You know, it's obviously a large capital deployment. So when I was looking at the press release, the EBITDA increase that you're getting from PA is because PA is already consolidated. The EBITDA that you're picking up is really only the reduction of the non-controlling interest. Obviously, non-controlling interest is after tax. You'd have to gross that $52.3 million up to a larger number. But even when you do that, against a $1.6 billion capital outlay, the math that I get here for the multiple is substantially larger than the 13 times.
Speaker #5: So when I was looking at the press It's obviously a large capital deployment. release, the EBITDA increase that you're getting from PA is because PA is already consolidated.
The math that I get here for the multiple is, is substantially larger than the 13th and so I know there's some kind of different accounting gaap accounting that's maybe around this. And I just thought for for the benefit of everybody, you could address how that works and and why it works out that way, please.
Andy Whitman: I just thought for the benefit of everybody, you could address how that works and why it works out that way, please.
Andrew Wittmann: I just thought for the benefit of everybody, you could address how that works and why it works out that way, please.
Speaker #5: The EBITDA that you're picking up is really only the reduction of the non-controlling interest. Obviously, non-controlling interest is after tax. So you'd have to gross that $52.3 million up to a larger number.
Venk Nathamuni: Yeah. Andy, thanks for the question. I know that we obviously, you mentioned that in your report as well. At a high level, as you rightly pointed out, there's a slight difference between the accounting and economic ownership. Just for everybody's benefit here, the economic ownership was 65%, and the accounting ownership was 70%. But there's obviously some dilution from what we call C-shares, which are basically shares that the employees own. To make a long story short, that's the delta. In terms of the absolute valuation, as we mentioned in the press release, it's a 13x multiple on EBITDA. Then if you take into account the synergies, it's a 12.3x multiple. We feel really good about the valuation for this and the value creation. Happy to take additional questions. Maybe, Bert, you can add to it as well.
Venk Nathamuni: Yeah. Andy, thanks for the question. I know that we obviously, you mentioned that in your report as well. At a high level, as you rightly pointed out, there's a slight difference between the accounting and economic ownership. Just for everybody's benefit here, the economic ownership was 65%, and the accounting ownership was 70%. But there's obviously some dilution from what we call C-shares, which are basically shares that the employees own. To make a long story short, that's the delta. In terms of the absolute valuation, as we mentioned in the press release, it's a 13x multiple on EBITDA. Then if you take into account the synergies, it's a 12.3x multiple. We feel really good about the valuation for this and the value creation. Happy to take additional questions. Maybe, Bert, you can add to it as well.
Speaker #5: But even when you do that, against a 1.6 billion dollar capital outlay, the math that I get here for the multiple is substantially larger than the 13 times.
Yeah, and Andy. Thanks for the question. And I know that we, uh, you know, obviously you you mentioned that in your report as well. So, at a high level, as you rightly pointed out, there's a slight difference between, you know, the accounting and economic ownership. So, just for everybody's benefit here, you know, the the economic ownership was 65% and the accounting ownership was 70. Uh, but there's obviously some dilution from what, what we call C shares, which are basically, uh, you know, shares that the employees own. So
Speaker #5: And so I know there's some kind of different accounting GAAP accounting that's maybe around this. And I just thought for the benefit of everybody, you could address how that works and why it works out that way.
Andrew Wittmann: And so I know there's some kind of different accounting, GAAP accounting that's maybe around this, and I just thought for the benefit of everybody, you could address how that works and why it works out that way, please.
Andrew Wittmann: And so I know there's some kind of different accounting, GAAP accounting that's maybe around this, and I just thought for the benefit of everybody, you could address how that works and why it works out that way, please.
Speaker #6: Yeah, please. Andy, thanks for the question. And I know that, obviously, you mentioned that in your report as well. So, at a high level, as you rightly pointed out, there's a slight difference between the accounting and economic ownership.
Venkatesh Nathamuni: Yeah, Andy, thanks for the question, and I know that we, you know, obviously, you mentioned that in your report as well. So at a high level, as you rightly pointed out, there's a slight difference between, you know, the accounting and economic ownership. So just for everybody's benefit here, you know, the economic ownership was 65%, and the accounting ownership was 70%. But there's obviously some dilution from what we call C shares, which are basically shares that the employees own. So to make a long story short, you know, that's the delta. But in terms of the absolute valuation, as we mentioned in the press release, you know, it's a 13x multiple on EBITDA, and then if you take into account the synergies, it's a 12.3 multiple.
Venkatesh Nathamuni: Yeah, Andy, thanks for the question, and I know that we, you know, obviously, you mentioned that in your report as well. So at a high level, as you rightly pointed out, there's a slight difference between, you know, the accounting and economic ownership. So just for everybody's benefit here, you know, the economic ownership was 65%, and the accounting ownership was 70%. But there's obviously some dilution from what we call C shares, which are basically shares that the employees own. So to make a long story short, you know, that's the delta. But in terms of the absolute valuation, as we mentioned in the press release, you know, it's a 13x multiple on EBITDA, and then if you take into account the synergies, it's a 12.3 multiple.
Speaker #6: So just for everybody's benefit here, the economic ownership is 65%, and the accounting ownership is 70. But there's obviously some dilution from what we call C shares, which are basically shares that the employees own.
Bert Subin: Yeah. Sure, Andy. What is actually what's happening here is when you take the accounting ownership, which was 70%, and then you reduce it by the employee benefit trust, we get down to a 60% ownership. And so we acquired 40% of the stake, which we highlighted. On the NCI, what we did is we reduced EBITDA by an after-tax number. And so it reduced EBITDA by a smaller amount. So essentially, we'll be adding back that NCI component to our EBITDA going forward. I think the important takeaway that we make highlighted as prepared remarks is we expect this to be accretive to earnings. And we see a lot of opportunity from both the revenue and cost energy with the combination of PA and Jacobs. So we can take some of the more specifics offline when we talk later on.
Bob Pragada: Yeah. Sure, Andy. What is actually what's happening here is when you take the accounting ownership, which was 70%, and then you reduce it by the employee benefit trust, we get down to a 60% ownership. And so we acquired 40% of the stake, which we highlighted. On the NCI, what we did is we reduced EBITDA by an after-tax number. And so it reduced EBITDA by a smaller amount. So essentially, we'll be adding back that NCI component to our EBITDA going forward. I think the important takeaway that we make highlighted as prepared remarks is we expect this to be accretive to earnings. And we see a lot of opportunity from both the revenue and cost energy with the combination of PA and Jacobs. So we can take some of the more specifics offline when we talk later on.
So, uh, to make a long story short, you know, that's the the Delta, but in terms of the absolute valuation, as we mentioned in the press release, you know, uh it's a 13-point x multiple on on ibida and then if you take into account the synergies of the 12.3 multiple. So we feel really good about the, uh, the valuation for this and the, and the value creation. Uh, but you know, happy to take additional questions uh, and maybe but you can add to it as well. Yeah, sure, maybe. Um, you know, the what is actually, What's Happening Here is when you take the accounting ownership, which was 70% and you reduce it, by the employee benefit, trust, we get down to a 60% ownership. And so we acquired 40% of the stake, which we highlighted
Speaker #6: So to make a long story short, that's the delta. But in terms of the absolute valuation, as we mentioned in the press release, it's a 13.x multiple on EBITDA.
Speaker #6: And then if you take into account the synergies of the 12.3 multiple, so we valuation for this. And the value feel really good about the creation.
Venkatesh Nathamuni: So we feel really good about the valuation for this and the value creation. But, you know, happy to take additional questions, and maybe, Burt, you can add to it as well.
Venkatesh Nathamuni: So we feel really good about the valuation for this and the value creation. But, you know, happy to take additional questions, and maybe, Burt, you can add to it as well.
Speaker #6: But happy to take additional questions and maybe Bert, you can add to it as well.
[Company Representative] (Jacobs Solutions): Happy to. Yeah, sure. Andy, you know, the... But what essentially what's happening here is, when you take the accounting ownership, which was 70 percent, and you reduce it by the employee benefit trust, we get down to a 60 percent ownership, and so we acquired 40 percent of the stake, which we highlighted. On the NCI, what we did is we reduced EBITDA by an after-tax number, and so it reduced EBITDA by a smaller amount. So essentially, you know, we'll be adding back that NCI component to our EBITDA going forward. I think the important takeaway that we, Craig, highlighted in his prepared remarks is, you know, we expect this to be accretive to earnings, and we see a lot of opportunity from both the revenue and cost synergy with the combination of PA and Jacobs.
Bob Pragada: Happy to. Yeah, sure. Andy, you know, the... But what essentially what's happening here is, when you take the accounting ownership, which was 70 percent, and you reduce it by the employee benefit trust, we get down to a 60 percent ownership, and so we acquired 40 percent of the stake, which we highlighted. On the NCI, what we did is we reduced EBITDA by an after-tax number, and so it reduced EBITDA by a smaller amount.
Speaker #1: Yeah. Sure. Andy, what it's actually what's happening here is when you take the accounting ownership, which was 70%, and then you reduce it by the employee benefit trust, we get down to a 60% ownership.
On the NCI, what we did is we reduced the but uh, by an after tax number, and so it reduced deep a thought by a smaller amount. So essentially, you know, we'll be adding back that NCI component is already but not going forward. I think the important takeaway that we make highlighted as prepared remarks is, you know, we expect this to be a creative to earnings um, and we see a lot of opportunity from both the revenue and cost energy with the, with the, the combination of PA and Jacobs. So we can take some of the more specifics offline. You know, when we talk later on,
Okay. Thanks for clarifying that guys.
Yep.
Speaker #1: And so, we highlighted—on the NCI, what we did is we reduced EBITDA by an after-tax number, and so it reduced EBITDA by a smaller amount.
Your next question comes from the line of Chad, Dillard with Bernstein. Please go ahead.
Andy Whitman: Okay. Thanks for clarifying that, guys.
Andrew Wittmann: Okay. Thanks for clarifying that, guys.
Bob Pragada: Your next question comes from the line of Chad Dillard with Bernstein. Please go ahead.
Operator: Your next question comes from the line of Chad Dillard with Bernstein. Please go ahead.
Speaker #1: So essentially, we'll be adding back that NCI component to our EBITDA going forward. I think the important takeaway that we make highlighted is prepared remarks is we expect this to be accretive to earnings.
Bob Pragada: So essentially, you know, we'll be adding back that NCI component to our EBITDA going forward. I think the important takeaway that we, Craig, highlighted in his prepared remarks is, you know, we expect this to be accretive to earnings, and we see a lot of opportunity from both the revenue and cost synergy with the combination of PA and Jacobs. We can take some of the more specifics offline, Neil, when we talk later on.
Chad Dillard: Hey. Good evening, guys. So, I wanted to spend some time on the project pipeline. I think you talked about it being up double digits. Could you break that down by the core end markets? And then, do you have any comment about fixed versus reimbursable? And then, finally, just on the global delivery model, how much of that is deployed using that method versus what's in your revenue today?
Chad Dillard: Hey. Good evening, guys. So, I wanted to spend some time on the project pipeline. I think you talked about it being up double digits. Could you break that down by the core end markets? And then, do you have any comment about fixed versus reimbursable? And then, finally, just on the global delivery model, how much of that is deployed using that method versus what's in your revenue today?
Hey, good evening guys. Uh, so I want to spend some time on the project pipeline, I think you talked about it being up, double digits. Uh, could you break that down by, uh, the court in markets and you can comment about, you know, fixed versus reimbursable.
Speaker #1: And we see a lot of opportunity from both the revenue and cost energy with the combination of PA and Jacobs. So we can take some of the more specifics offline.
And then finally, just on the global delivery model. Um, you know, how much of that is deployed using that method, uh, versus, you know, what's in your Revenue today?
[Company Representative] (Jacobs Solutions): We can take some of the more specifics offline, Neil, when we talk later on.
Speaker #1: When we talk later on.
Yeah, maybe maybe I'll simplify a chat if you look at a 3, main verticals.
Speaker #5: Okay. Thanks for clarifying that, guys.
Andrew Wittmann: Okay. Thanks for clarifying that, guys.
Andrew Wittmann: Okay. Thanks for clarifying that, guys.
Speaker #6: Yep.
[Company Representative] (Jacobs Solutions): Yep.
Bob Pragada: Yep.
Operator: Your next question comes from the line of Chad Dillard with Bernstein. Please go ahead.
Operator: Your next question comes from the line of Chad Dillard with Bernstein. Please go ahead.
Bob Pragada: Yeah. Maybe I'll simplify it, Chad. If you look at our three main verticals, water and environmental, the pipeline is up. And when I say double digits, I'm talking about double digits that are 25% and above. In life sciences and advanced manufacturing, double-digit pipeline growth, those are 50% and up. And in our critical infrastructure, we're talking kind of high single digits and low double digits pipeline growth. That's not acutely focused on the US. That's a global number. And so the pipeline is strong. And that's a 12- to 18-month pipeline that we look at. Then there's win rates and everything else. But the markets that we're serving are in a really strong state right now.
Bob Pragada: Yeah. Maybe I'll simplify it, Chad. If you look at our three main verticals, water and environmental, the pipeline is up. And when I say double digits, I'm talking about double digits that are 25% and above. In life sciences and advanced manufacturing, double-digit pipeline growth, those are 50% and up. And in our critical infrastructure, we're talking kind of high single digits and low double digits pipeline growth. That's not acutely focused on the US. That's a global number. And so the pipeline is strong. And that's a 12- to 18-month pipeline that we look at. Then there's win rates and everything else. But the markets that we're serving are in a really strong state right now.
Speaker #3: from the line of Chad Dillard with Your next question comes Bernstein. Please go ahead.
Water environmental up the pipeline is up and when I say double digits, very much double digits that are 25% and above.
In in life sciences and advanced Manufacturing.
Speaker #7: Hey, good evening, guys. So I want to spend some time on the project pipeline. I think you talked about it being up double down by the core end digits.
Chad Dillard: Hey, good evening, guys. So I want to spend some time on the project pipeline. I think you talked about it being up double digits. Could you break that down by the core end markets? And maybe you can comment about, you know, fixed versus reimbursable. And then finally, just on the global delivery model, you know, how much of that is deployed using that method, versus, you know, what's in your revenue today?
Chad Dillard: Hey, good evening, guys. So I want to spend some time on the project pipeline. I think you talked about it being up double digits. Could you break that down by the core end markets? And maybe you can comment about, you know, fixed versus reimbursable. And then finally, just on the global delivery model, you know, how much of that is deployed using that method, versus, you know, what's in your revenue today?
Double digit pipeline growth. Those are 50% and up.
Speaker #7: markets? And then you can comment about fixed Could you break that versus reimbursable. And then finally, just on the global delivery model. How much of that is deployed using that method
And and in our transfer in our critical infrastructure, we're talking kind of high single digits in low double digits. Uh, if pipeline growth
Speaker #7: versus what's in your revenue
Speaker #7: today? Yeah.
Bob Pragada: Yeah, maybe I'll simplify it, Chad. If you look at our three main verticals, water and environmental, up, the pipeline is up. And when I say double digits, pretty much double digits that are 25% and above. In life sciences and advanced manufacturing, double-digit pipeline growth, those are 50% and up. And in our critical infrastructure, we're talking kinda high single digits and low double digits at pipeline growth. That's not acutely focused on the US, that's a global number. And so, you know, the pipeline is strong, and that's a 12- to 18-month pipeline that we look at, that, you know, then there's win rates and everything else. But the markets that we're serving are in a really strong state right now.
Bob Pragada: Yeah, maybe I'll simplify it, Chad. If you look at our three main verticals, water and environmental, up, the pipeline is up. And when I say double digits, pretty much double digits that are 25% and above. In life sciences and advanced manufacturing, double-digit pipeline growth, those are 50% and up. And in our critical infrastructure, we're talking kinda high single digits and low double digits at pipeline growth. That's not acutely focused on the US, that's a global number. And so, you know, the pipeline is strong, and that's a 12- to 18-month pipeline that we look at, that, you know, then there's win rates and everything else. But the markets that we're serving are in a really strong state right now.
Speaker #6: Three main verticals—water and environmental—up. The pipeline is up. And when I say double, simplify it, Chad. Double digits—talking about double digits. If you look at our numbers, they are 25% and above.
That's not acutely focused on the US. That's a global number. And so, uh, you know, the pipeline is, uh, is strong. And that's a, that's a 12 to 18 month, uh, pipeline. That we look at, uh, that, you know, then there's wind rates and everything else. But the, but the markets that we're serving are in a really strong state right now.
Speaker #6: In life sciences and advanced manufacturing, double-digit pipeline growth—those are 50% and up. And in our critical infrastructure, we're talking kind of high single digits and low double-digit pipeline growth.
Chad Dillard: Gotcha. That's helpful. Then just maybe circling back on the AI topic. So how are you communicating to your customers and value creation from deploying AI in a particular project? Are you having explicit conversations about sharing that? Maybe just talk about if you can even give a particular example would be very helpful.
Chad Dillard: Gotcha. That's helpful. Then just maybe circling back on the AI topic. So how are you communicating to your customers and value creation from deploying AI in a particular project? Are you having explicit conversations about sharing that? Maybe just talk about if you can even give a particular example would be very helpful.
Gotcha. That's that's helpful. Um, let me just maybe circling back on the uh, the AI topic. So how are you communicating to your customers and value creation from deploying AI like in a particular project? Um are you having explicit conversations about sharing that maybe you said talk about you know if you can even give like a particular example of a very helpful.
Speaker #6: That's not acutely focused on the US. That's a global number. And so the pipeline is strong. And that's a 12 to 18-month pipeline that we look at that then there's win rates and everything else.
Yeah.
Bob Pragada: Yep. Well, in order to do that, you think you got to go back and our client's issues right now. We're not solving for issues that were around or even contemplated 5 years ago, 10 years ago, 20 years ago. And so how we're articulating this to our clients is not in the form of bots or agents or people being replaced with AI figures. How we're discussing it is the use of data to get greater data insights to solve for complex issues and deliver outcomes at a faster and more predictable rate. That's how we're describing it to our clients. And our clients are co-creating with us in the platforms that we develop, kind of port one. The second where we go to market is around AI advisory.
Bob Pragada: Yep. Well, in order to do that, you think you got to go back and our client's issues right now. We're not solving for issues that were around or even contemplated 5 years ago, 10 years ago, 20 years ago. And so how we're articulating this to our clients is not in the form of bots or agents or people being replaced with AI figures. How we're discussing it is the use of data to get greater data insights to solve for complex issues and deliver outcomes at a faster and more predictable rate. That's how we're describing it to our clients. And our clients are co-creating with us in the platforms that we develop, kind of port one. The second where we go to market is around AI advisory.
Speaker #6: But the markets that we're serving are in a really strong state right now.
Speaker #7: Gotcha. That's helpful. And then just maybe circling back on the AI topic. So how are you communicating to your customers the value creation from deploying AI in a particular project?
Chad Dillard: Gotcha. That's, that's helpful. And then just maybe circling back on the AI topic. So how are you communicating to your customers the value creation from deploying AI, like, in a particular project? Are you having explicit conversations about sharing that? Maybe just, like, talk about, you know, if you can even give, like, a particular example, that'd be very helpful.
Chad Dillard: Gotcha. That's, that's helpful. And then just maybe circling back on the AI topic. So how are you communicating to your customers the value creation from deploying AI, like, in a particular project? Are you having explicit conversations about sharing that? Maybe just, like, talk about, you know, if you can even give, like, a particular example, that'd be very helpful.
Speaker #7: Are you having explicit conversations about sharing that, maybe just talk about if you can even give a particular example that'd be very helpful?
Replaced with uh, with with AI uh uh figures. How we're discussing it is the use of data to get greater Data Insights to solve for complex issues and deliver outcomes at a faster, uh, and and and more predictable rate.
Speaker #6: Yep. Well, in order to do that, you think you’ve got to go back. And our clients’ issues right now—we’re not solving for issues that were around or even contemplated five years ago, ten years ago, twenty years ago.
Bob Pragada: Yep. Well, like, in order to do that, I think you got to go back, and our clients' issues right now, we're not solving for issues that were around or even contemplated 5 years ago, 10 years ago, 20 years ago. And so how we're articulating this to our clients is not in the form of bots or agents or people being replaced with AI figures. How we're discussing it is the use of data to get greater data insights, to solve for complex issues, and deliver outcomes at a faster and more predictable rate. That's how we're describing it to our clients. And our clients are co-creating with us in the platforms that we develop, kind of part one. The second, where we go to market, is around AI advisory, where we have-...
Bob Pragada: Yep. Well, like, in order to do that, I think you got to go back, and our clients' issues right now, we're not solving for issues that were around or even contemplated 5 years ago, 10 years ago, 20 years ago. And so how we're articulating this to our clients is not in the form of bots or agents or people being replaced with AI figures. How we're discussing it is the use of data to get greater data insights, to solve for complex issues, and deliver outcomes at a faster and more predictable rate. That's how we're describing it to our clients. And our clients are co-creating with us in the platforms that we develop, kind of part one.
Speaker #6: And so how we're articulating this to our clients is not in the form of bots or agents, or people being replaced with AI figures.
Bob Pragada: But whether it be in the aviation space or it be in the transportation space, we've got a lot of our clients that want to understand how AI can enable their business even more. And so now with PA, we've now doubled the size of our AI, not just on the development side, but also AI consultancy component as well. And this isn't AI consultancy just driving business transformation. This is AI consultancy on how they can effectively serve their client base even greater. So the investment thesis around increasing our investment in PA coupled with how PA is growing in that space across all the end markets, and then us going to market together is really creating an exciting story going forward.
Bob Pragada: But whether it be in the aviation space or it be in the transportation space, we've got a lot of our clients that want to understand how AI can enable their business even more. And so now with PA, we've now doubled the size of our AI, not just on the development side, but also AI consultancy component as well. And this isn't AI consultancy just driving business transformation. This is AI consultancy on how they can effectively serve their client base even greater. So the investment thesis around increasing our investment in PA coupled with how PA is growing in that space across all the end markets, and then us going to market together is really creating an exciting story going forward.
Speaker #6: How we're discussing it is the use of data to get greater data insights to solve for complex issues and deliver outcomes at a faster and more predictable rate.
Speaker #6: That's how we're describing it to our clients. And our clients are co-creating with us in the platforms that we develop. Kind of part one.
Speaker #6: The second, where we go to market is around AI advisory. But we have whether it be in the aviation space or it be in the transportation space, we've got a lot of our clients that want to understand how AI can enable their PA, we've now doubled business even more.
Bob Pragada: The second, where we go to market, is around AI advisory, where we have, whether it be in the aviation space or it be in the transportation space, we've got, you know, a lot of our clients that want to understand how AI can enable their business even more.And so now with PA, we've now doubled the size of our AI, not just on the development side, but also AI consultancy component as well. And this is an AI consultancy just driving business transformation. This is AI consultancy on how they can effectively serve their client base even greater. So we've, you know, the investment thesis around increasing our investment in PA, coupled with how PA is growing in that space across all the end markets, and then us going to market together is really creating an exciting story going forward.
That's how we're describing it to our clients and and our clients are co-creating with us, uh, in the platforms that we uh, we develop kind of part 1. The second where we go to market is around AI advisory but we have whether it be in the Aviation Space or it be in the transportation space, we've got you know, a lot of our clients that want to understand how AI can can enable their business uh even more. And so now with PA we've now doubled the size of our our AI not just on the development side but also AI consultancy uh component as well. And this is an AI consultancy just driving business transformation. This is AI. Can talk and see on how they can effectively serve their client base, uh, even even greater. So we've uh, you know, the P the investment thesis around, increasing our investment in PA coupled with
Bob Pragada: Whether it be in the aviation space or it be in the transportation space, we've got, you know, a lot of our clients that want to understand how AI can enable their business even more. And so now with PA, we've now doubled the size of our AI, not just on the development side, but also AI consultancy component as well. And this is an AI consultancy just driving business transformation. This is AI consultancy on how they can effectively serve their client base even greater. So we've, you know, the investment thesis around increasing our investment in PA, coupled with how PA is growing in that space across all the end markets, and then us going to market together is really creating an exciting story going forward.
What how PA is growing, uh, in in, in that space across all the end markets, uh, and then us going to Market together. Uh, is is really creating an exciting story going forward.
Great. Thanks. Bob.
Speaker #6: Also, there's an AI consultancy component as well. And this is an AI consultancy just driving business transformation. This is AI, and so now with consultancy on how they can effectively serve their client base.
You're our next question. Comes from the line of Andy kaplowitz with Citi group, please go ahead. Hey, good afternoon, everyone.
Chad Dillard: Great. Thanks, Bob.
Chad Dillard: Great. Thanks, Bob.
Hi, good afternoon.
Operator: Your next question comes from the line of Andy Kaplowitz with Citigroup. Please go ahead.
Operator: Your next question comes from the line of Andy Kaplowitz with Citigroup. Please go ahead.
Speaker #6: Even greater, so we've the increasing our investment in PA coupled investment thesis around with how PA is end markets. And then us going to market together is really creating an exciting story going.
Andy Kaplowitz: Hey. Good afternoon, everyone.
Andrew Kaplowitz: Hey. Good afternoon, everyone.
Bob Pragada: Hi. Good afternoon.
Bob Pragada: Hi. Good afternoon.
Andy Kaplowitz: Bob, I just want to dig in on a couple of areas. I think historically, you guys have been very strong at Semicon, particularly on the memory side. So what are you seeing in terms of investment there? Could we actually be in acceleration mode again? It seems like we are, but maybe any more detail there would be helpful.
Andrew Kaplowitz: Bob, I just want to dig in on a couple of areas. I think historically, you guys have been very strong at Semicon, particularly on the memory side. So what are you seeing in terms of investment there? Could we actually be in acceleration mode again? It seems like we are, but maybe any more detail there would be helpful.
Baba, I just wanted to dig in on a couple of areas, um, you know, I think historically you guys have been very strong in semicon particularly on the memory side. Uh, so what are you seeing in terms of investment there? Could we actually be an acceleration mode again? Like it seems like we are but maybe any more detail, there would be helpful.
Speaker #6: forward.
Speaker #7: Great. Thanks,
Jerry Revich: Great. Thanks, Bob.
Chad Dillard: Great. Thanks, Bob.
Speaker #7: Bob.
Bob Pragada: Absolutely. Short answer is yes. Yes, Andy. We are in acceleration mode. There are three main players around the world. One is American. And the advances in high-bandwidth memory that the American provider is going to market with at record pace took 20 years during the traditional DRAM cycle to advance nodes. That 20 years is now being shortened into 2 to 3. And so to get the plant ready and delivering on those chips is a big deal. So they've made some announcements in Idaho and New York, and we're squarely in the middle of those.
Bob Pragada: Absolutely. Short answer is yes. Yes, Andy. We are in acceleration mode. There are three main players around the world. One is American. And the advances in high-bandwidth memory that the American provider is going to market with at record pace took 20 years during the traditional DRAM cycle to advance nodes. That 20 years is now being shortened into 2 to 3. And so to get the plant ready and delivering on those chips is a big deal. So they've made some announcements in Idaho and New York, and we're squarely in the middle of those.
Speaker #3: Your next question comes from the line of Andy Kaplowitz with...
Operator: Your next question comes from the line of Andy Kaplowitz with Citigroup. Please go ahead.
Operator: Your next question comes from the line of Andy Kaplowitz with Citigroup. Please go ahead.
Speaker #3: Citigroup.
Speaker #3: ahead.
Speaker #8: Hey, good afternoon,
Andy Kaplowitz: Hey, good afternoon, everyone.
Andy Kaplowitz: Hey, good afternoon, everyone.
Speaker #8: everyone.
Speaker #6: afternoon.
Bob Pragada: Hi, good afternoon.
Bob Pragada: Hi, good afternoon.
Andy Kaplowitz: Bob, I just want to dig in on a couple of areas. You know, I think historically you guys have been very strong in semicon, particularly on the memory side. So what are you seeing in terms of investment there? Could we actually be in acceleration mode again? Like, it seems like we are, but maybe any more detail there would be helpful.
Andy Kaplowitz: Bob, I just want to dig in on a couple of areas. You know, I think historically you guys have been very strong in semicon, particularly on the memory side. So what are you seeing in terms of investment there? Could we actually be in acceleration mode again? Like, it seems like we are, but maybe any more detail there would be helpful.
Speaker #8: couple of areas. I think historically, you guys have been very strong in semicon, particularly on the memory side. So what are you seeing in terms of investment there?
Speaker #8: Could we actually be an acceleration mode again? It seems like we Please go are, but maybe any more detail there would be helpful.
Absolutely. Uh, short answer is. Yes. Uh, yes. Andy, we are, we are an acceleration mode. You know, there are 3, main players around the world, 1 is American and uh, and the advances in high beam with memory. That the American provider is uh is going to Market with at record Pace. You know, it took 20 years during the traditional dram cycle to Advanced nodes that 20 years is now being short shortened into 2 to 3. And so to get the plant ready and delivering on those chips uh is a is a big deal. So they've made some announcements uh in uh in Idaho and New York. And uh we're we're squarely in the middle of those.
Speaker #6: Absolutely. Short answer is yes. Yes, Andy, we are in acceleration mode. There are three main players around the world. One is American. And the advances in high bandwidth memory that the American provider is going to market with at record pace took 20 years during the traditional DRAM cycle to advance nodes.
Bob Pragada: Absolutely. Short answer is yes. Yes, Andy, we are, we are in acceleration mode. You know, there are three main players around the world, one is American. And, and the advances in High Bandwidth Memory that the American provider is, is going to market with at record pace, you know, took 20 years during the traditional DRAM cycle to advance nodes. That 20 years is now being shortened into 2 to 3, and so to get the plant ready and delivering on those chips, is a, is a big deal. So they've made some announcements, in, in Idaho and New York, and, we're, we're squarely in the middle of those.
Bob Pragada: Absolutely. Short answer is yes. Yes, Andy, we are, we are in acceleration mode. You know, there are three main players around the world, one is American. And, and the advances in High Bandwidth Memory that the American provider is, is going to market with at record pace, you know, took 20 years during the traditional DRAM cycle to advance nodes. That 20 years is now being shortened into 2 to 3, and so to get the plant ready and delivering on those chips, is a, is a big deal. So they've made some announcements, in, in Idaho and New York, and, we're, we're squarely in the middle of those.
Andy Kaplowitz: And then, Bob, just following up on the water vertical, I mean, I think you answered a question earlier about environmental. Water's been strong for you guys for a while. I get some questions occasionally about municipal spending, what eventually happens as IIJA starts to run down. So maybe you can talk about I think you've had good bookings here recently on water, but maybe you can talk about the longevity of the water infrastructure cycle as you see it.
Andrew Kaplowitz: And then, Bob, just following up on the water vertical, I mean, I think you answered a question earlier about environmental. Water's been strong for you guys for a while. I get some questions occasionally about municipal spending, what eventually happens as IIJA starts to run down. So maybe you can talk about I think you've had good bookings here recently on water, but maybe you can talk about the longevity of the water infrastructure cycle as you see it.
Speaker #6: Years has now been shortened into two to three. And that 20, so to get the plant ready and delivering on those chips, is a big deal.
Speaker #6: So they've made some announcements in Idaho and New York, and we're squarely in the middle of those.
Bob Pragada: Yeah. It's high single digits for us right now and how it's flowing through, Andy. And so maybe I'd kind of divide it between US and international. Maybe start with the real positive. The result of the AMP-8 cycle in the UK is driving kind of double-digit growth force in the water market there in Europe. But we're also seeing strong tailwinds in the Middle East and in Australia. Australia has been a real highlight for us, both in water and in transportation. The municipal spending and the tie to IIJA never really was a strong one. IIJA really was focused heavily on transportation. And so that has continued.
Bob Pragada: Yeah. It's high single digits for us right now and how it's flowing through, Andy. And so maybe I'd kind of divide it between US and international. Maybe start with the real positive. The result of the AMP-8 cycle in the UK is driving kind of double-digit growth force in the water market there in Europe. But we're also seeing strong tailwinds in the Middle East and in Australia. Australia has been a real highlight for us, both in water and in transportation. The municipal spending and the tie to IIJA never really was a strong one. IIJA really was focused heavily on transportation. And so that has continued.
Speaker #7: And then, Bob, just following up on the water vertical—I mean, I think you answered a question earlier about environmental. Water has been strong for you guys for a while.
Andy Kaplowitz: And then, Bob, like, just following up on the water vertical, I mean, I think you answered a question earlier about environmental. Water's been strong for you guys for a while. I get some questions occasionally about, you know, municipal spending, what eventually happens as IIJA starts to run down. So maybe you can talk about it. I think you, you've had good bookings here recently on water, but maybe you can talk about the longevity of the water infrastructure cycle as you see it.
Andy Kaplowitz: And then, Bob, like, just following up on the water vertical, I mean, I think you answered a question earlier about environmental. Water's been strong for you guys for a while. I get some questions occasionally about, you know, municipal spending, what eventually happens as IIJA starts to run down. So maybe you can talk about it. I think you, you've had good bookings here recently on water, but maybe you can talk about the longevity of the water infrastructure cycle as you see it.
Speaker #7: I get some questions occasionally about municipal spending, what eventually happens as IIJ starts to run down. So maybe you can talk about it. I think you've had good bookings here recently on water, but maybe you can talk about the longevity of the water infrastructure cycle as
Speaker #7: you see it.
Speaker #6: Yeah.
Speaker #6: It's high single digits for us right now on how it's flowing through, Andy. And so maybe I'd kind of divide it between US and international.
Bob Pragada: Yeah, it's high single digits for us right now on how it's flowing through, Andy. So maybe I'd kind of divide it between US and international. Maybe start with the real positive. You know, the result of the AMP8 cycle in the UK is driving kind of double-digit growth for us in the water market there in Europe, but we're also seeing strong tailwinds in the Middle East and in Australia. Australia has been a real highlight for us, both in water and in transportation. You know, the municipal spending and the tie to IIJA never really was a strong one. IIJA really was focused heavily on transportation, and so that has continued. And again, the whole water scarcity, aged assets, and just the sheer effects of climate, these aren't...
Bob Pragada: Yeah, it's high single digits for us right now on how it's flowing through, Andy. So maybe I'd kind of divide it between US and international. Maybe start with the real positive. You know, the result of the AMP8 cycle in the UK is driving kind of double-digit growth for us in the water market there in Europe, but we're also seeing strong tailwinds in the Middle East and in Australia. Australia has been a real highlight for us, both in water and in transportation. You know, the municipal spending and the tie to IIJA never really was a strong one. IIJA really was focused heavily on transportation, and so that has continued. And again, the whole water scarcity, aged assets, and just the sheer effects of climate, these aren't...
Yeah, it's high single digits for us right now and how it's flowing through Indian. So maybe I'd kind of divide it between us and international. Maybe start with the the the the real positive, you know the the result of the amp 8 cycle in the UK is driving kind of double digit growth for us in the in the Water Market there in Europe. But we're also seeing strong Tailwinds in the Middle East. And in Australia, Australia has been a real highlight for us both in water. And in transportation, you know, the municipal spending and the tie to J, never really was a strong 1. I j really was focused heavily on transportation and so that has continued. And, and again, the whole water, scarcity, aged assets. And, um, and and, and just the sheer
Bob Pragada: And again, the whole water scarcity, aged assets, and just the sheer effects of climate; these aren't (I'm not saying they're completely delinked from funding opportunities that states and locales have), but definitely have risen up on the priority list just because of the severity. So we see kind of a long-term tail on that.
Bob Pragada: And again, the whole water scarcity, aged assets, and just the sheer effects of climate; these aren't (I'm not saying they're completely delinked from funding opportunities that states and locales have), but definitely have risen up on the priority list just because of the severity. So we see kind of a long-term tail on that.
Speaker #6: Positive. The result of the AMP-8 cycle in the UK is driving kind of double-digit growth for us in the water market there in Europe, but we're also seeing strong tailwinds in the Middle East and in Australia.
Speaker #6: Australia has been a transportation. The municipal spending and the tie to IIJ never really was a strong one. IIJ really was focused heavily on transportation.
Venk Nathamuni: Andy, if I could add to this, what Bob said, there's been tremendous strength in bookings in water over the last several quarters. We've highlighted some marquee wins that typically take multiple years to play out. We see that pipeline continue to grow and the visibility for a multi-year period. We feel really good about our water market overall.
Venk Nathamuni: Andy, if I could add to this, what Bob said, there's been tremendous strength in bookings in water over the last several quarters. We've highlighted some marquee wins that typically take multiple years to play out. We see that pipeline continue to grow and the visibility for a multi-year period. We feel really good about our water market overall.
Speaker #6: And so, that has continued. And again, the whole water scarcity, aged assets, and just the sheer effects of climate—I'm not saying they're completely de-linked from funding opportunities that states and locales have.
Effects of climate. Um, it these aren't I'm not saying they're completely Del from, uh, you know, funding opportunities that states and locals have. Uh, but definitely have risen up on the priority list, uh, just because of the severity. So we see kind of a long-term tail on that. And, and if we could add to, this is what Bob said. You know, there's been tremendous strength in bookings in water over the last several quarters, and we've highlighted some Marquee events that typically take multiple years to play out. So we see that uh, pipeline continued to grow and the visibility for a multi-year period. So we feel really good about our water Market overall.
Appreciate the color, guys.
You are next question. Comes from the line of Jerry rivet with Wells Fargo. Please go ahead.
Andy Kaplowitz: Appreciate the color, guys.
Andrew Kaplowitz: Appreciate the color, guys.
Bob Pragada: I'm not saying they're completely delinked from, you know, funding opportunities that states and locales have, but definitely have risen up on the priority list, just because of the severity. So we see kind of a long-term tail on that.
Bob Pragada: I'm not saying they're completely delinked from, you know, funding opportunities that states and locales have, but definitely have risen up on the priority list, just because of the severity. So we see kind of a long-term tail on that.
Bob Pragada: Yep.
Bob Pragada: Yep.
Operator: Your next question comes from the line of Jerry Revich with Wells Fargo. Please go ahead.
Operator: Your next question comes from the line of Jerry Revich with Wells Fargo. Please go ahead.
Speaker #6: But definitely have risen up on the priority list just because of the severity. So we see kind of a long-term tail on that. And Andy, if you could add to just what Bob said, there's been tremendous strength in bookings in water over the last several quarters, and we've highlighted some marquee wins that typically take multiple years to play out.
Jerry Revich: Yes, hi. Good afternoon and good evening. Can I ask on critical infrastructure, really impressive performance relative to the end markets that you folks are clearly gaining share? Could you just double-click for us in terms of the drivers of the share gains? Is it just part of the market where you folks have higher concentration? Have you bet on the right projects moving forward? Can you just expand on the drivers of what looks to be about 5, 6 points of end market outgrowth that you're delivering?
Jerry Revich: Yes, hi. Good afternoon and good evening. Can I ask on critical infrastructure, really impressive performance relative to the end markets that you folks are clearly gaining share? Could you just double-click for us in terms of the drivers of the share gains? Is it just part of the market where you folks have higher concentration? Have you bet on the right projects moving forward? Can you just expand on the drivers of what looks to be about 5, 6 points of end market outgrowth that you're delivering?
Venkatesh Nathamuni: Andy, if we could add to just what Bob said, you know, there's been tremendous strength in bookings in water over the last several quarters, and we've highlighted some marquee wins that typically take multiple years to play out. So we see that pipeline continue to grow and the visibility for a multi-year period, so we feel really good about our water market overall.
Venkatesh Nathamuni: Andy, if we could add to just what Bob said, you know, there's been tremendous strength in bookings in water over the last several quarters, and we've highlighted some marquee wins that typically take multiple years to play out. So we see that pipeline continue to grow and the visibility for a multi-year period, so we feel really good about our water market overall.
Speaker #6: So we see that pipeline continue to grow, and the visibility for a multi-year period. So we feel really good about our water market overall.
Just part of the market where you folks have higher concentration. Have you been on the right projects? Moving forward. Uh can you just expand uh on the drivers of I don't know what looks to be about 5, 6 points of enmarket outgrowth that you're delivering
Speaker #7: Appreciate the color, guys.
Andy Kaplowitz: Appreciate the color, guys.
Andy Kaplowitz: Appreciate the color, guys.
Speaker #3: Your next question comes from the line of Jerry Rivich with Wells Fargo. Please go ahead.
Bob Pragada: Yep.
Bob Pragada: Yep.
Operator: Your next question comes from the line of Jerry Revich with Wells Fargo. Please go ahead.
Operator: Your next question comes from the line of Jerry Revich with Wells Fargo. Please go ahead.
Yeah, uh, well maybe I I most succinctly talk about it in 2 main areas. Uh,
Bob Pragada: Yeah. Well, maybe I'd most succinctly talk about it in two main areas, Jerry. One is that our international business in transportation, not that it has been strong, very strong. And that's been highlighted by really key wins that we've had in Europe, in the Middle East, and in Australia. Australia, it's been really nice growth there as well. Aviation and rail has really been the strong drivers there. We still do a lot of work on the highways work. But those two have been really strong drivers. And then the US, with continued growth in the aviation sector there, coupled with now some high-speed opportunities as well as faster rail in locations, we've been capturing share gain in that area as well. So strong internationally, driven by aviation, rail, and highways, strong in the US, driven by aviation and rail.
Bob Pragada: Yeah. Well, maybe I'd most succinctly talk about it in two main areas, Jerry. One is that our international business in transportation, not that it has been strong, very strong. And that's been highlighted by really key wins that we've had in Europe, in the Middle East, and in Australia. Australia, it's been really nice growth there as well. Aviation and rail has really been the strong drivers there. We still do a lot of work on the highways work. But those two have been really strong drivers. And then the US, with continued growth in the aviation sector there, coupled with now some high-speed opportunities as well as faster rail in locations, we've been capturing share gain in that area as well. So strong internationally, driven by aviation, rail, and highways, strong in the US, driven by aviation and rail.
Speaker #6: Yes, hi. Good afternoon and good evening. Can I ask about critical infrastructure—really impressive performance relative to the end markets, and it seems that you folks are clearly gaining share?
Jerry Revich: Yes, hi, good afternoon and good evening. Can I ask on critical infrastructure, you know, really impressive performance relative to the end markets that you folks are clearly gaining share. Could you just double-click for us in terms of the drivers of the share gains? Is it just part of the market where you folks have higher concentration? Have you been on the right projects moving forward? Can you just expand on the drivers of what looks to be about 5, 6 points of end market outgrowth that you're delivering?
Jerry Revich: Yes, hi, good afternoon and good evening. Can I ask on critical infrastructure, you know, really impressive performance relative to the end markets that you folks are clearly gaining share. Could you just double-click for us in terms of the drivers of the share gains? Is it just part of the market where you folks have higher concentration? Have you been on the right projects moving forward? Can you just expand on the drivers of what looks to be about 5, 6 points of end market outgrowth that you're delivering?
Speaker #6: Could you just double-click for us in terms of the drivers of the share gains? Is it just part of the market where you folks have higher concentration?
Speaker #6: Have you bet on the right projects moving forward? Can you just expand on the drivers of what looks to be about 5, 6 points of end-market outgrowth that you're delivering?
Speaker #4: Yeah. Well, maybe I'd most succinctly talk about it in two main areas. Jerry, one is that our international business in transportation not that has been strong, very strong.
Bob Pragada: Yeah. Well, maybe I'd, I'd most succinctly talk about it in two main areas, Jerry. One is that our international business in transportation, not that it has been strong, very strong, and that's been highlighted by really key wins that we've had in Europe, in the Middle East, and in Australia. Australia, it's been really nice growth there as well. Aviation and rail has really been the strong drivers there. We still do a lot of work on the highways work, but those two have been really strong drivers. And then the US, you know, with continued growth in the aviation sector there, coupled with now some high-speed opportunities, as well as faster rail in locations, we've been capturing share gain in that area, as well.
Bob Pragada: Yeah. Well, maybe I'd, I'd most succinctly talk about it in two main areas, Jerry. One is that our international business in transportation, not that it has been strong, very strong, and that's been highlighted by really key wins that we've had in Europe, in the Middle East, and in Australia. Australia, it's been really nice growth there as well. Aviation and rail has really been the strong drivers there. We still do a lot of work on the highways work, but those two have been really strong drivers. And then the US, you know, with continued growth in the aviation sector there, coupled with now some high-speed opportunities, as well as faster rail in locations, we've been capturing share gain in that area, as well.
Speaker #4: And that's been highlighted by really key wins that we've had in Europe, in the Middle East, and in Australia. Australia has seen really nice growth there as well.
Jerry 1 is, is that our international business in Transportation, uh, not that it has been strong, very strong. And that's been highlighted by really key wins that we've had in, uh, in Europe, uh, in the Middle East. And in Australia, Australia is it's been, uh, really, really nice growth there as well. Aviation and rail has really been the, the, the strong drivers there. We still do a lot of work in the highways work. Uh, but those 2 have been really strong strong, uh drivers. And then the US, you know, with continued um growth in the aviation sector there. Uh coupled with now, some high speed opportunities, as well as faster rail, uh, in locations. Um, we've been, uh, we've been capturing share game in that area, uh, as well. So, uh, strong internationally driven by Aviation, and Rail and, and highways strong in the US driven by Aviation and rail.
Speaker #4: Aviation and rail has really been the strong drivers there. We still do a lot of work on the highways work. But those two have been really strong drivers.
Jerry Revich: And if we could just pull on that market share thread into the AI theme, you folks on the semi-plant side with the use of digital twins have been able to allow your customer to deliver projects really quickly. It sounds like based on your comments earlier on the call, Bob, you see yourselves as gaining share in that type of environment. What's the outlook for the broader industry structure as you see it 5 years down the line, 10 years down the line? Do companies that look like Jacobs gain share? Do companies like Jacobs do more EPCM-type work for an integrated solution like you're doing here on the data center example that you gave us?
Jerry Revich: And if we could just pull on that market share thread into the AI theme, you folks on the semi-plant side with the use of digital twins have been able to allow your customer to deliver projects really quickly. It sounds like based on your comments earlier on the call, Bob, you see yourselves as gaining share in that type of environment. What's the outlook for the broader industry structure as you see it 5 years down the line, 10 years down the line? Do companies that look like Jacobs gain share? Do companies like Jacobs do more EPCM-type work for an integrated solution like you're doing here on the data center example that you gave us?
Speaker #4: And then the US, with continued growth in the aviation sector there, coupled with now some high-speed opportunities as well as faster rail in locations, we've been capturing share gain in that area as well.
Speaker #4: So strong internationally, driven by aviation and rail and highways, strong in the US, driven by aviation and rail.
Bob Pragada: So, strong internationally, driven by aviation, rail, and highways. Strong in the US, driven by aviation and rail.
Bob Pragada: So, strong internationally, driven by aviation, rail, and highways. Strong in the US, driven by aviation and rail.
Speaker #6: And if we could just pull on that market share thread, into the AI theme, you folks on the twins, have been able to allow your customer to deliver projects really semi-plant side, with the use of digital quickly.
Jerry Revich: You know, if we could just pull on that market share thread, you know, into the AI theme, you folks on the semi plant side, with the use of digital twins, have been able to allow your customer to deliver projects really quickly. Just, it sounds like based on your comments earlier on the call, Bob, you see yourselves as gaining share in that type of environment. What's the outlook for the broader industry structure as you see it? Five years down the line, 10 years down the line, do companies that look like Jacobs gain share? Do companies like Jacobs do more EPCM-type work for an integrated solution like you're doing here, on the data center example that you gave us?
Jerry Revich: You know, if we could just pull on that market share thread, you know, into the AI theme, you folks on the semi plant side, with the use of digital twins, have been able to allow your customer to deliver projects really quickly. Just, it sounds like based on your comments earlier on the call, Bob, you see yourselves as gaining share in that type of environment. What's the outlook for the broader industry structure as you see it?
And, you know, if we could just pull on that market, share thread, uh, you know, into the AI theme, you folks on the semi plant side with the use of digital twins. Have been able to allow the your customer to deliver projects really quickly. Just it sounds like, based on your comments earlier on the call. Bob, you see yourselves as gaining share in that type of environment. What's the outlook for the broader industry structure? As you see it 5 years down the line, 10 years down the line to companies that look like. Jacobs getting shared 2 companies like Jacobs do more, epcm type work for an integrated solution like you're doing here. Uh on the data center example that you gave us can can you just talk about how you see this all playing out for for the industry as a whole because you know you folks have been ahead of the pocket in terms of your digital twin Investments Etc.
Jerry Revich: Can you just talk about how you see this all playing out for the industry as a whole because you folks have been ahead of the pocket in terms of your Digital Twin investments, etc.?
Jerry Revich: Can you just talk about how you see this all playing out for the industry as a whole because you folks have been ahead of the pocket in terms of your Digital Twin investments, etc.?
Speaker #6: Just—it sounds like, based on your comments earlier on the call, Bob, you see yourselves as gaining share in that type of environment. What's the outlook for the broader industry structure as you see it five years down the line, ten years down the line?
Bob Pragada: Yeah. So, maybe and just to clarify, Jerry, you were talking specifically about semi, or were you talking kind of broader base across kind of the tech landscape?
Bob Pragada: Yeah. So, maybe and just to clarify, Jerry, you were talking specifically about semi, or were you talking kind of broader base across kind of the tech landscape?
Jerry Revich: Five years down the line, 10 years down the line, do companies that look like Jacobs gain share? Do companies like Jacobs do more EPCM-type work for an integrated solution like you're doing here, on the data center example that you gave us? Can you just talk about how you see this all playing out for the industry as a whole? Because, you know, you folks have been ahead of the pack in terms of your Digital Twin investments, et cetera.
Speaker #6: Do companies that look like Jacobs gain share? Do companies like Jacobs do more EPCM-type work for an integrated solution, like you’re doing here on the data center example that you gave us?
Jerry Revich: Yeah. Thank you, Bob. I was just talking across the broader tech landscape, right? So in other words, you folks have clearly used digital tools and led the market and gained share. And I just want your perspective on where you see the industry headed in five years now that the tools are getting better and better.
Jerry Revich: Yeah. Thank you, Bob. I was just talking across the broader tech landscape, right? So in other words, you folks have clearly used digital tools and led the market and gained share. And I just want your perspective on where you see the industry headed in five years now that the tools are getting better and better.
Speaker #6: Can you just talk about how you see this all playing out for the industry as a whole? Because you folks have been ahead of the pocket in terms of your digital twin investments, etc.
Jerry Revich: Can you just talk about how you see this all playing out for the industry as a whole? Because, you know, you folks have been ahead of the pack in terms of your Digital Twin investments, et cetera.
Yeah, thank you. But I was just talking across the broader Tech landscape, right? So in other words, you folks have clearly used the digital tools and let the market and gain share. And I'm just want your perspective on where you see the industry headed uh in in in 5 years now that the tools are are are getting better and better.
Speaker #4: Yeah, so maybe—and just to clarify, Jerry, you were talking specifically about semi, or were you talking kind of broader-based across the—kind of the...
Bob Pragada: Yeah. So maybe, and just to clarify, Jerry, you were talking specifically about semi, or were you talking kind of broader base across the, you know, kind of the tech landscape?
Bob Pragada: Yeah. So maybe, and just to clarify, Jerry, you were talking specifically about semi, or were you talking kind of broader base across the, you know, kind of the tech landscape?
Bob Pragada: Got it. Got it. So I'd kind of talk about it from our participation across the ecosystem of call it the electron landscape. So everything from the chip at the semi-side through power and water, whether it be at the grid level or what eventually goes into the data center, our participation across that ecosystem, I think, has been a big differentiator. And so when I look out five years from now, the partnership that we have with NVIDIA and kind of the tech relationship down to the chip design and how that affects utilities for these plants, whether it be with any of the high-bandwidth memory players or other traditional logics layers, that's what's driving that out-year growth. Because as these plants, no plant is the same. As these plants are continuing to become more and more complicated, we're out in front of those.
Bob Pragada: Got it. Got it. So I'd kind of talk about it from our participation across the ecosystem of call it the electron landscape. So everything from the chip at the semi-side through power and water, whether it be at the grid level or what eventually goes into the data center, our participation across that ecosystem, I think, has been a big differentiator. And so when I look out five years from now, the partnership that we have with NVIDIA and kind of the tech relationship down to the chip design and how that affects utilities for these plants, whether it be with any of the high-bandwidth memory players or other traditional logics layers, that's what's driving that out-year growth. Because as these plants, no plant is the same. As these plants are continuing to become more and more complicated, we're out in front of those.
Speaker #4: tech landscape? Yeah.
Speaker #6: Thank you, Bob. I was just talking across the broader tech landscape, right? So in other words, you folks have clearly used digital tools and led the market and have gained share.
Jerry Revich: Yeah, thank you, Bob. I was just talking across the broader tech landscape, right? So in other words, you folks have clearly used digital tools-
Jerry Revich: Yeah, thank you, Bob. I was just talking across the broader tech landscape, right? So in other words, you folks have clearly used digital tools.
Bob Pragada: Yeah
Bob Pragada: Yeah
Jerry Revich: -and led the market and gained share, and I just want your perspective on where you see the industry headed, in five years, now that-
Jerry Revich: And led the market and gained share, and I just want your perspective on where you see the industry headed, in five years, now that.
Speaker #6: And I just want your perspective on where you see the industry headed in five years now that the tools are—
Bob Pragada: Yeah
Bob Pragada: Yeah
Jerry Revich: The tools are getting better and better.
Jerry Revich: The tools are getting better and better.
Speaker #6: getting better and better. Got
Speaker #4: Got it. So I've kind of talked about it from our participation across the ecosystem of, call it, the electron landscape. So everything from the chip at the semi side through power and water, whether it be at the grid level or what eventually goes into the data center.
Bob Pragada: Got it. Got it. So I kind of talk about it from within our participation across the ecosystem of, you know, call it the electron landscape. So everything from the chip at the semi side through power and water, whether it be at the grid level or what eventually goes into the data center. Our participation across that ecosystem, I think, has been a big differentiator. And so when I look out five years from now, you know, the partnership that we have with NVIDIA and the kind of the tech relationship down to the chip design and how that affects utilities for these plants, whether it be with any of the high bandwidth memory players or other traditional logic players, that's what's driving that out-year growth. Because as these plants...
Bob Pragada: Got it. So I kind of talk about it from within our participation across the ecosystem of, you know, call it the electron landscape. So everything from the chip at the semi side through power and water, whether it be at the grid level or what eventually goes into the data center. Our participation across that ecosystem, I think, has been a big differentiator. And so when I look out five years from now, you know, the partnership that we have with NVIDIA and the kind of the tech relationship down to the chip design and how that affects utilities for these plants, whether it be with any of the high bandwidth memory players or other traditional logic players, that's what's driving that out-year growth. Because as these plants.
Got it, got it. So I I kind of talked about it from where our participation across the ecosystem of, you know, call it the the the the electron landscape. So everything from the chip at the semi side through uh, Power and Water, whether it be at the grid level or what eventually goes into the data center, our participation across that that ecosystem, I think has been a big, big differentiator. And so when I look out 5 years from now, you know, the partnership that we have with Nvidia and the kind of the tech relationship down to the chip design and how that affects utilities for these plants. Whether it be with any of the high bandwidth, memory players or uh, or or other, um, traditional um uh logic players.
Speaker #4: Our participation across that ecosystem I think has been a big differentiator. And so when I look out five years from now, the partnership that we have with NVIDIA and the kind of the tech relationship down to the chip design and how that affects utilities for these plants whether it be with any of the high bandwidth memory players or other traditional logic players.
Bob Pragada: Now, you back all that up with design automation, AI tools in order to get greater data insights. And we're continuing to really and digital twins, like you said. I'm sorry, Jerry, then that protective. I don't know if I'm allowed to call it a moat, but I will. That moat starts to develop, and we go from there. So we're excited about where we're positioned. This is something we've been in for the better part of 40 years, and we see that going forward for another 40.
Bob Pragada: Now, you back all that up with design automation, AI tools in order to get greater data insights. And we're continuing to really and digital twins, like you said. I'm sorry, Jerry, then that protective. I don't know if I'm allowed to call it a moat, but I will. That moat starts to develop, and we go from there. So we're excited about where we're positioned. This is something we've been in for the better part of 40 years, and we see that going forward for another 40.
That's what's driving that out out-year growth because as these plants, no plant is is the same as these plants are continuing to become more and more complicated. We're out in front, uh, of those that you back all that up with design, automation AI Tools in order to get greater Data Insights. And we're continuing to to Really and digital twins. Like you said, uh, and I'm sorry, Jerry, um, then you're you know, that, that protective
Um, I know if I'm allowed to call the most but I will that mode starts to develop and uh, and uh, and we go from there. So we're we're excited about where we're positioned. This is something we've been in, for the better part of 40 years and we see that going forward for another 40.
Thank you.
Speaker #4: that out-year growth. Because as these plants no plant is the same. As these That's what's driving plants are continuing to become more and more complicated, we're out in front of those.
Bob Pragada: No plant is the same. As these plants are continuing to become more and more complicated, we're out in front of those. Now, you back all that up with design automation, AI tools in order to get greater data insights, and we're continuing to really... And digital twins, like you said, and, I'm sorry, Jerry, then you're, you know, that, that protective, I don't know if I'm allowed to call it a moat, but I will. That moat starts to develop and, and, and we go from there. So we're excited about where we're positioned. This is something we've been in for the better part of 40 years, and we see that going forward for another 40.
Bob Pragada: No plant is the same. As these plants are continuing to become more and more complicated, we're out in front of those. Now, you back all that up with design automation, AI tools in order to get greater data insights, and we're continuing to really... And digital twins, like you said, and, I'm sorry, Jerry, then you're, you know, that, that protective, I don't know if I'm allowed to call it a moat, but I will. That moat starts to develop and, and, and we go from there. So we're excited about where we're positioned. This is something we've been in for the better part of 40 years, and we see that going forward for another 40.
And that concludes our question and answer session. I will now turn the conference back over to Bob pagata for closing comments,
Jerry Revich: Thank you.
Jerry Revich: Thank you.
Speaker #4: Now, you back all that up with design automation, AI tools in order to get greater data insights. And we're continuing to really— and digital twins, like you said. And I'm sorry, Jerry.
Operator: That concludes our question and answer session. I will now turn the conference back over to Bob Pragada for closing comments.
Operator: That concludes our question and answer session. I will now turn the conference back over to Bob Pragada for closing comments.
Bob Pragada: Thank you, Krista. Thank you, everyone, for joining the earnings call. Some great questions. Really excited about the performance last quarter and our performance for the balance of the year. And we look forward to engaging with many of you over the coming days and weeks. Thanks, everyone.
Bob Pragada: Thank you, Krista. Thank you, everyone, for joining the earnings call. Some great questions. Really excited about the performance last quarter and our performance for the balance of the year. And we look forward to engaging with many of you over the coming days and weeks. Thanks, everyone.
Speaker #4: Then that protective I don't know if I'm allowed to call it a moat, but I will. That moat starts to develop. And we go from there.
Thank you Krista. Thank you, everyone for uh, for joining the earnings. Call some great questions. Really, uh, excited about uh, the performance last quarter, and our performance for the balance of the year, and we look forward to engaging with many of you over the coming days and weeks. Thanks everyone.
Well, ladies and gentlemen, this does conclude today's conference call. Thank you for your participation and you may now disconnect
Speaker #4: So we're excited about where we're positioned. This is something we've been in for the better part of 40 years, and we see that going forward for another 40.
Operator: Well, ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.
Operator: Well, ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.
Speaker #6: Thank you.
Jerry Revich: Thank you.
Jerry Revich: Thank you.
Speaker #3: And that concludes our question and answer session. I will now turn the conference back over to Bob Pragada for closing comments.
Operator: That concludes our question and answer session. I will now turn the conference back over to Bob Pragada for closing comments.
Operator: That concludes our question and answer session. I will now turn the conference back over to Bob Pragada for closing comments.
Speaker #6: Thank you, Krista. Thank you, everyone, for joining the EARNIS call. Some great questions. Really excited about the performance last quarter and our performance for the balance of the year.
Bob Pragada: Thank you, Krista. Thank you everyone for joining the earnings call. Some great questions. Really excited about the performance last quarter and our performance for the balance of the year, and we look forward to engaging with many of you over the coming days and weeks. Thanks, everyone.
Bob Pragada: Thank you, Krista. Thank you everyone for joining the earnings call. Some great questions. Really excited about the performance last quarter and our performance for the balance of the year, and we look forward to engaging with many of you over the coming days and weeks. Thanks, everyone.
Speaker #6: And we look forward to engaging with many of you. Over the coming days and weeks. Thanks, everyone.
Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.
Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.
