Jacobs Solutions Inc.

please stand by we're about to begin good morning ladies and gentlemen and welcome to the jacobs solutions second quarter 2023 earnings call and webcast at this time all participants are in a listen-only mode and please be advised that this call is being recorded after the speaker's prepared remarks there will be a question and answer session if you would like to ask a question during this time simply press star 1 on your telephone keypad and if you would like to withdraw your question simply press star 1 again And now at this time, I will turn things over to Mr. Jonathan Evans, Vice President of Corporate Development and Investor Relations. Please go ahead, Mr. Evans.

Thank you. Good morning. Our earnings announcement and 10Q were filed this morning, and we have posted a slide presentation on our website, which we'll reference during the call. In addition, this morning we published a release announcing our intent to create two independent companies with the separation of our critical mission solutions business. I would like to refer you to slide two of the presentation material for information about our forward-looking statements and non-GAAP financial measures. Turning to the agenda, speaking on today's call will be Jacob's CEO, Bob Fregata, and CFO, Kevin Berryman. We are also joined by our incoming CFO, Claudia Jaramillo. Bob will begin by providing an overview of today's portfolio announcement, then summarizing highlights from our second quarter results. Kevin will provide a more in-depth discussion of our financial metrics, as well as a review of our balance sheet and cash flow. Finally, Bob will provide details on our updated outlook, along with closing remarks. And then we'll open up the call for questions.

With that, I'll turn it over to Bob. Thank you, Jonathan. And thank all of you for joining us today to discuss our second quarter fiscal year 2023 business performance. Jacobs has a storied 75-year history of delivering value for our clients, employees, and shareholders. We have consistently strived to improve our company through a purposeful strategy of transforming our portfolio to capture higher value opportunities in our core and adjacent markets. Turning to slide four, today's announcement marks a key inflection point as we progress on our journey of continuous improvement and value creation. This morning, Jacobs announced our intent to separate our critical mission solutions business through a spinoff. The decision to separate CMS is the result of a comprehensive review and evaluation to identify opportunities that streamline our portfolio and maximize strategic focus and potential growth opportunities for both future companies. We will sharpen both companies' focus on their distinct strategies and operational initiatives that are most relevant to the specific industries in which they operate. Each company will have a tailored capital allocation and structure that is directed toward their respective growth strategies, as well as a strengthened ability to attract and retain top talent. Moving forward, in addition to our industry leading position in core sectors, Jacobs will be a higher growth, higher margin, technology enabled solutions provider, continue to address the world's most complex critical infrastructure and sustainability challenges. Jacob's core skill sets in technical and consulting services, coupled with data science and technology-enabled expertise, will continue to differentiate us from our peers and allow us to provide end-to-end solutions to our global clients. Our streamlined portfolio will include leading positions in critical infrastructure such as water and environment, energy transition, transportation, and the advanced manufacturing sectors. Once the separation is complete, we can focus our attention on building additional capabilities and expertise that matter most to our clients in these areas. And importantly, we'll achieve even greater alignment with our three key accelerators, climate response, data solutions, and consulting and advisory. The new CMS will be a lead-in, pure-play government services company that provides technical consulting, applied science research, training, intelligent asset management, and program management services to federal government agencies. CMS generated approximately $4.4 billion in FY22 revenue. Today's announcement is another step in Jacobs' long record of taking bold actions to drive value creation and position our company for an even stronger future. And as we grow and thrive, our partners can achieve more as well. I want to emphasize that this announcement does not change how we work with our clients. As we work towards a separation, it will be business as usual. We remain committed to delivering world-class service to our clients who will be able to rely on our people they know and trust. Turning to slide five. The proposed capital structure, governance, and other matters relating to the separation will be communicated at a later date. Subject to satisfaction of customary conditions, we are targeting to complete the separation in the second half of fiscal year 2024 through a distribution that is intended to be tax-free to Jacob shareholders for U.S. federal income tax purposes. Turning to slide six. I want to reinforce the importance of our inclusive and forward-thinking culture. Last quarter, we reinforced our commitment to inclusion and diversity by including a gender equality KPI in our sustainability-linked bond. Jacobs remains categorically committed to this goal. Turning to Q2 and slide number seven. I want to thank our more than 60,000 global teammates for delivering a record second quarter as measured by both revenue and operating profits. Notably, our underlying business remains strong and we continue to drive growth organically. We continue to invest behind and grow share in all key areas of focus against our three needle moving growth accelerators, climate response, data solutions, and consulting and advisory. Our people and places line of business delivered strong performance with net revenue up 7% year on year, 10% in constant currency, and operating profit up 21% year-over-year, 25% in constant currency. Our pipeline and gross margin and backlog increased, further supported by strong legislative drivers, materializing in federal, state, and local initiatives. CMS remains a stable base of recurring revenue, driven primarily this quarter by the NASA Kennedy Rebid Award. CMS Q2 revenue was 11% higher than the previous quarter and 5% higher year over year. In terms of bookings this quarter, CMS also achieved an impressive overall win rate, and the outlook for FY23 continues to look strong, with its pipeline up double digits year over year. We continue to invest behind CMS, opening our Japan office during Q2. Our first organic office opening since 2004. PA Consulting sales and backlog again increased year over year, led by sales in the energy and utilities and defense sectors demonstrating momentum and consistency. I'm pleased to see margins improved in the quarter to over 20% supported by milestone incentive achievement. PA continues to benefit from increased opportunities in Europe. For example, PA won a mandate for a private Scandinavian renewable energy company that is currently active in renewable electricity generation and storage. PA is working with the client to create a market entry strategy across offshore and onshore wind in several new European markets. Our Divergent Solutions operating unit had a strong operating profit quarter with operating profit up 46% year-over-year. During the quarter, we extended our collaboration with Palantir across multiple infrastructure applications. Kevin will give more detail in his comments. Looking across the broader market environment, we continue to see tremendous opportunities for growth in climate response and energy and environment. For example, our approximately $2 billion water business continues to exceed expectations and reinforce our position in the water sector. Water continues to be a pace setter with pipeline growth up materially year over year. During Q2, we were awarded the Donald Tillman Advanced Water Purification Facility by the LA Bureau of Sanitation, one of the largest potable reuse projects in the U.S., delivering a more sustainable drinking water source in a drought-stressed region. Fittingly, we would like to call attention to Drinking Water Week, an opportunity to proudly celebrate the work we do with utility partners to provide safe drinking water to millions of people around the world. Our cities and places pipeline also grew double digits, including key wins in the Middle East, where we are working to reimagine urban development addressing major environmental and quality of life challenges, and predominantly powered by clean energy. Globally, we are seeing significant energy transition opportunities. Last month, we officially launched a dedicated business unit in PNPS to focus on significant opportunities in global energy transition, to accelerate growth and address the ever-expanding needs of our clients. Turning to slide eight. During Q2, we were awarded the Gold Medal Award for International Corporate Achievement and Sustainable Development by the World Environment Center, a non-governmental organization advancing sustainable development through corporate business practices. Their annual Gold Medal Award recognizes one international company demonstrating a global vision and a commitment to sustainable development through innovative applications of policies, economic, environmental, and social responsibilities. The independent jury commended our thoughtful approach to sustainability, combining commitments with global initiatives and partnerships with positive and far-reaching impact. Turning to slide nine, in summary, we remained well-positioned with our industry-leading ranking across multiple sectors. This is particularly evident in our advanced manufacturing business, where our long-term pipeline increased double digits year over year. Further, in our infrastructure business, legislative actions continue to provide visible growth opportunities despite continued political debate on broader topics. For example, recent wins this quarter include three significant intelligent O&M programs in California, Florida, and Louisiana. which we secured through strong differentiation with the use of our digitally enabled platform. We expect operating profit growth to outpace organic top line increases as we remain focused on quality of backlog. Now I'll turn the call over to Kevin to review our financial results in further detail.