Jacobs shares fell 3.2% post-earnings as investors focused on margin compression pressures despite solid revenue growth and backlog expansion, signaling concerns over profitability sustainability amid the PA Consulting acquisition.
- Adjusted EPS grew 22% to $1.75, supported by 9% organic net revenue growth and 70 basis points of year-over-year margin expansion.
- Backlog increased 22% to a record $27 billion, with a trailing 12-month book-to-bill ratio of 1.4x on gross revenue and 1.2x on net revenue.
- Gross revenue grew 27% year-over-year; adjusted EBITDA rose 14% to $327 million, but margins compressed to 14.1%.
- Strong growth in life sciences and advanced manufacturing (+12% net revenue growth) and critical infrastructure (+9% net revenue growth), led by double-digit growth in transportation.
- The acquisition of PA Consulting caused a wider than usual GAAP to adjusted EPS spread, indicating temporary earnings quality challenges and contributing to investor caution.
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