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Introduction & Market Context
Jacobs Engineering Group Inc (NYSE:J) released its fourth quarter and full-year 2025 financial results on November 20, 2025, showcasing strong performance across key metrics. The company's stock responded positively in pre-market trading, rising 3.55% to $150.20, reflecting investor confidence in the results that exceeded analyst expectations.
The engineering and professional services firm delivered an adjusted earnings per share (EPS) of $1.75, surpassing the forecasted $1.67 and representing a 27.7% year-over-year increase. This performance comes amid a challenging macroeconomic environment but demonstrates the company's resilience and strategic positioning in high-growth sectors.
Quarterly Performance Highlights
Jacobs reported GAAP gross revenue of $3.2 billion for Q4 2025, a 6.6% increase year-over-year, while adjusted net revenue grew 5.8% to $2.2 billion. The company achieved an adjusted EBITDA of $324 million, up 12.0% compared to the same period last year, with an adjusted EBITDA margin of 14.4% - a record quarterly figure.
As shown in the following summary of Q4 and full-year results:
While adjusted metrics showed robust growth, GAAP earnings declined significantly, with net earnings of $138 million representing a 55.4% decrease year-over-year. This discrepancy highlights substantial one-time charges affecting GAAP results, while the underlying business performance remained strong.
The quarterly results demonstrated consistent growth across key performance indicators compared to the previous year:
For the full fiscal year 2025, Jacobs delivered adjusted net revenue of $8.7 billion, a 5.3% increase from FY 2024, while adjusted EBITDA grew by 13.9% to $1.2 billion. The company's adjusted EPS for the full year reached $6.12, up 15.9% year-over-year.
Segment and End Market Analysis
Jacobs' Infrastructure and Advanced Facilities (I&AF) segment showed strong performance in Q4 2025, with adjusted operating profit increasing by 16.1% year-over-year to $254 million. Similarly, PA Consulting delivered robust results with operating profit growing 16.6% to $72 million.
The following breakdown illustrates segment financial performance:
Looking at end markets within the I&AF segment, performance varied significantly. Life Sciences & Advanced Manufacturing led growth with a 19.0% year-over-year increase, while Critical Infrastructure grew by 5.9%. The Water & Environmental sector experienced a 4.0% contraction compared to the same period last year.
The following chart details the end market performance and exposure:
During Q4 2025, Jacobs secured several significant project wins across various sectors, reinforcing its market position and contributing to its growing backlog, which increased 5.6% year-over-year to $23.1 billion.
As shown in the following project highlights:
Balance Sheet and Cash Flow
Jacobs demonstrated strong financial discipline throughout fiscal year 2025, generating $687 million in cash flow from operations and $607 million in free cash flow. The company returned more than 100% of free cash flow to shareholders during the year, repurchasing $754 million in shares and declaring a quarterly dividend of $0.32 per share, a 10% increase year-over-year.
The company's balance sheet remains robust, with net debt of $1.0 billion and a net leverage ratio of 0.8x, below the low end of its 1.0-1.5x target range. This represents a significant improvement from Q1 2025, when the ratio stood at 1.1x.
The following chart illustrates the company's leverage position:
FY 2026 Outlook
Looking ahead to fiscal year 2026, Jacobs provided a positive outlook, projecting adjusted net revenue growth of 6% to 10% year-over-year and adjusted EBITDA margin between 14.4% and 14.7%. The company expects adjusted EPS to range from $6.90 to $7.30, representing approximately 16% growth at the midpoint compared to FY 2025.
As detailed in the following outlook summary:
During the earnings call, CEO Bob Pragada expressed confidence in the company's trajectory, stating, "We delivered strong results for Q4 and are pleased to end FY25, the first year of our five-year strategy. Our consolidated backlog grew 6% to $23.1 billion, setting a new record to close out the year."
CFO Venk Nathamuni added, "We see continued opportunity to increase our margin profile moving forward," highlighting management's focus on profitability improvement alongside revenue growth.
Strategic Initiatives
Jacobs continues to emphasize sustainability and digital transformation as core strategic pillars. The company completed its inaugural Double Materiality Assessment in early 2025 and has maintained strong sustainability credentials, including recognition on the Dow Jones Sustainability World Index and receiving a Gold Medal in the EcoVadis Sustainability Ratings.
The company's strategic focus on expanding AI and digital capabilities, alongside partnerships with technology companies like Nvidia and Palantir, positions it well in high-growth sectors. Strategic expansions in data centers and semiconductor design services are expected to drive future growth, aligning with global technological trends.
When analysts inquired about potential risks from federal government shutdowns during the earnings call, management confirmed no material effect on operations. Discussions also centered on ongoing negotiations regarding PA Consulting and the global expansion of data center services.
Despite the positive outlook, Jacobs faces several challenges, including regulatory uncertainty in the environmental sector, potential global economic headwinds, supply chain disruptions, competitive pressures in the AI and digital sectors, and currency fluctuations affecting international operations.
Full presentation:
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