Jacobs Solutions Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Jacobs Fiscal Second Quarter 2021 Earnings Conference call and webcast. At this time, all participants are in a listen-only mode. After this week's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now turn the call over to Jonathan Dorff in Best Relations. Thank you. Please go ahead.

Thank you. Good morning to all. Our earnings announcement was filed this morning. We have posted a copy of this slide presentation on our website, which we will reference during the call. During that presentation, we'll be making forward-looking statements, including with respect to the continuing effects of the COVID-19 pandemic, potential government stimulus programs, and our financial outlook, among others. I would like to refer you to our forward-looking statement disclaimer, which is included on slide two, regarding these and other forward-looking statements. During this presentation, we'll be referring to certain non-GAAP financial measures. Please refer to slide two of the presentation for more information on these figures. In addition, during the presentation, we'll discuss comparisons of current results to prior periods on a pro forma basis. See slide two for more information on the calculation of these pro forma metrics. For pro-former comparisons, current and prior periods include the results of the Wood Nuclear Business, which closed in March of 2020, and the Buffalo Group, which closed in November of 2020. Our reported results only include results from PA consulting from the closing date of March 2, 2021, through the end of fiscal quarter. And last, otherwise indicated, pro-former comparisons discussed today do not include PA consulting in the prior comparable periods. Turning to the agenda on slide three. Speaking on today's call will be Jacobs Chair and CEO, Steve Dimitrio, President and Chief Operating Officer, Bob Fregata, and President and Chief Financial Officer, Kevin Berryman. Steve will begin by updating the progress we are making against our strategy and the future ESG at Jacobs. Bob will then review our performance by line of business. And Kevin will provide a more in-depth discussion of our financial metrics followed by an update on our FOCUS 2023 and M&A initiatives, as well as a review of our balance sheet and cash flow. Finally, Steve will provide detail on our updated outlook, along with some closing remarks. Then we'll open the call for your questions. In the appendix of this presentation, we provide additional ESG-related information, including examples of our leading ESG solutions. With that, I'll now pass it over to Steve Dimitriou, Chair and CEO.

Thank you, John. Thanks to all of you for joining us today to discuss our second quarter fiscal year 2021 business performance and key initiatives. As the pandemic lessens its impact here in the United States, it's vital to recognize the significant struggles that are still occurring throughout the world, especially in India. Jacobs made an immediate donation to the United Way in New Delhi for critical medical supplies. And I'm particularly proud of our company and employees who together have donated $200,000 through our internal giving platform collectively. We have and will continue to support those that are still being impacted by the pandemic, including, for example, our operations in the Philippines. Turning to slide four. Before discussing our second quarter results, it's important to continue to reiterate how we think about our business. by aligning and executing against our long-term strategy to drive superior value for our stakeholders. We take a multi-year approach to our rigorous strategy formation. This long-term mindset involves proactively assessing and aligning our portfolio toward large secular growth opportunities where we can deliver sustained double-digit profit growth. The transformation that Jacobs has undergone over the last several years has created significant value measured by relative total shareholder return. As you have seen from our recent organic actions, the PA consulting investment and the acquisition of the Buffalo Group, we believe there's a significant opportunity to deliver differentiated digitally enabled solutions as the world accelerates its efforts to modernize infrastructure, improve global supply chains and enhance national security. We have started the development of our new corporate strategy for fiscal year 2022 to 24, which we will present to the investor community later this year. As to our financial results, I'm pleased with our strong second quarter performance, with net revenue increasing 7% year-over-year and adjusted EBITDA growth of 27%. Backlog ended the second quarter up 10% year-over-year and up 7% on a pro forma basis. Our strategic investment in PA Consulting closed on March 2nd and demonstrated higher than expected results in the March quarter, with 19% revenue growth in Sterling, up 28%, including the benefit of FX. We are also excited by the revenue synergies our joint Jacobs PA teams are creating, resulting in a robust pipeline in line with our deal model expectations. Given the stronger performance across Jacobs in the early closing of the PA investment, we are increasing our full fiscal year 2021 adjusted EBITDA and adjusted EPS outlook. Looking beyond fiscal 2021, we see the potential for one of the most attractive periods for growth in our company's history, activated through alignment of our portfolio to numerous secular growth opportunities in the expected infrastructure stimulus across the globe. Turning to slide five. Sustainability at Jacobs is reflected in our company's purpose of delivering solutions for a more connected, sustainable world, as well as through our values. we do things right, we challenge the accepted, we aim higher, and we live inclusion. This is critical for our people, to work for a company that believes sustainability is fundamental to what we stand for as an organization. I'm proud of our efforts over the last few years, as we are now being recognized by various external governance groups. For example, ISS recently updated their ESG assessment of Jacobs, where we are now approaching top decile in both environmental and social categories. These results are a credit to our people and their focus on our purpose and values. And of course, on an external basis, ESG is a significant growth opportunity for Jacobs. Building on the success of our sustainability strategy launched in 2019, Plan Beyond 2.0 reinforces our commitment to driving to a net zero economy through furthering our sustainable business offerings. We are in the early stages of a significant business growth opportunity to partner with our global customers and communities to provide solutions with their net zero carbon commitments. Now with our investment in PA Consulting, Jacobs is uniquely positioned across the entire end-to-end ESG opportunity. For example, we're implementing the first biogeochemical reactor pilot plant project for PFAS remediation in the U.S. supporting Germany's transition to significant net zero power generation and distribution by 2030. We're teaming up with water utilities in Australia to support decarbonization, working with industrial clients globally on their energy and resource management programs for advanced manufacturing facilities, and many other projects, including those shared in the appendix to this presentation. altogether sustainable solutions is a high growth business opportunity for jacobs today comprising nearly five billion dollars of our revenue which by the way makes jacobs one of the largest esg solutions providers with that i'll turn the call over to bob brigada to provide more detail by line of business thank you steve moving on to slide six to review the quarter's performance for critical mission solutions business