10-Q · May 5, 2026
Jacobs Solutions reported a strong revenue increase for Q2 2026 with $3.69 billion, up 27.0% year-over-year, but faced a GAAP EPS loss of $0.32, significantly missing expectations of $1.64. Adjusted EPS was $1.75,…
Earnings analysis · 10-Q
J earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Jacobs reported strong fiscal Q3 revenue growth, with revenue of $4.076B, up 34.5% year over year, driven overwhelmingly by 39% I&AF growth and accompanied by a $6.198B increase in total backlog to $28.888B. However,…
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Jacobs reported strong fiscal Q3 revenue growth, with revenue of $4.076B, up 34.5% year over year, driven overwhelmingly by 39% I&AF growth and accompanied by a $6.198B increase in total backlog to $28.888B. However, gross margin declined to 19.9% from 25.0%, while GAAP diluted EPS fell to $1.15 from $1.55 as PA Consulting transaction-related non-deductible costs lifted the tax rate to 43.4%. Cash generation improved over the nine-month period, but the PA transaction increased long-term debt by $1.3B and quarterly net interest expense by 61.2%.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.15
What stood out
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Revenue growth reaccelerated to 34.5%
Revenue rose $1.045B, or 34.5%, year over year to $4.076B, and increased from $3.69B in fiscal Q2 2026. I&AF delivered $3.747B of revenue, up 39%, led by Global Operations and strong Americas and International performance.
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Operating profit recovered sequentially
GAAP operating profit increased $51.7M, or 22.0%, year over year to $286.7M. Operating margin improved sequentially from -2.2% in fiscal Q2 2026 to 7.0% in fiscal Q3 2026.
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Backlog expanded by $6.2B
I&AF backlog increased $6.159B year over year to $28.429B at June 26, 2026, predominantly reflecting Advanced Manufacturing growth. Total company backlog was $28.888B versus $22.690B a year earlier.
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Operating cash flow increased year over year
Nine-month operating cash flow rose $49.1M year over year to $352.8M. Capital expenditures were $61.7M, or 17.5% of operating cash flow, implying $291.0M of nine-month free cash flow.
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Restructuring programs retain material savings potential
Management expects Separation-related initiatives to be substantially completed by fiscal year-end 2026, with estimated gross annualized pre-tax cash savings of $200M to $245M. PA Consulting cost actions are expected to generate a further $50M to $65M of annualized savings.
What to watch
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Tax and transaction costs reduced GAAP EPS
GAAP diluted EPS fell $0.40 year over year to $1.15 from $1.55, despite higher operating profit. The effective tax rate rose to 43.4% from 21.9%, including $35.8M of non-deductible PA Consulting transaction expenses that management says will affect the remainder of fiscal 2026.
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Gross-margin dilution despite revenue growth
Gross margin contracted 510 basis points year over year to 19.9% from 25.0%, and fell from 21.5% in fiscal Q2 2026. Management attributed the pressure to pass-through-cost revenue, project mix, and lower utilization primarily at PA Consulting.
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PA acquisition increased leverage and interest cost
Long-term debt increased by $1.3B from September 26, 2025, primarily following $1.3B of 4.75% and 5.375% bond issuances to fund the PA Consulting transaction. Quarterly net interest expense increased $17.6M, or 61.2%, to $46.3M.
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PA Consulting faced client-approval delays
PA Consulting quarterly revenue declined $3.2M, or 1%, to $329.5M because delayed client approvals adversely affected revenue-recognition timing. Its quarterly revenue compares with 39% growth in I&AF.
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Material residual floating-rate exposure
Management identified $1.00B of principal still subject to variable interest-rate exposure after a $200M swap. A 1.00% increase in floating rates would have raised nine-month interest expense by approximately $9.7M.
Management's outlook
The 10-Q does not provide explicit numerical revenue or EPS guidance. Management states it believes $1.17B of cash, $1.50B of revolver availability and operating cash generation are adequate for projected requirements over the next 12 months; quantitative FY2026 outlook was provided separately with the earnings release.
Earlier filings 4
10-Q · May 6, 2025
Jacobs reported three-month revenue of $2,910,415 (thousands), up from $2,847,179 (thousands) a year ago, with gross profit rising to $738,345 (thousands) and operating profit improving to $208,648 (thousands).…
10-Q · August 6, 2024
Jacobs reported quarter revenue of $4,231,580 (thousands) vs $4,186,702 (thousands) a year ago, with gross profit rising to $916,780 (thousands) while operating profit dipped to $260,464 (thousands). Diluted EPS…
10-K · November 21, 2023
Jacobs Solutions Inc. reports a strategic focus on sustainable solutions, emphasizing its transformational journey over recent years with a commitment to Climate Response, Data Solutions, and Consulting & Advisory…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.