Jacobs Solutions Inc.

Thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Jacobs Solution third quarter 2024 earnings conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. I will now turn the conference over to Ayan Banerjee, Senior Vice President of Investor Relations and Finance. Ayan, you may begin your conference.

Thank you. Good morning. Our earnings announcement was filed this morning, and we have posted a slide presentation on our website, which we will refer during the call. I would like to refer you to slide two of the presentation material for information about our forward-looking statements, non-GAAP financial measures, and operating metrics. Turning to the agenda on slide three. Speaking on today's call will be Jacobs CEO, Bob Pregara, Special Advisor to the CEO, Kevin Berman, as well as our new CFO, Venk Nathamuni. Bob will begin by providing an overview of recent activities and then summarizing highlights from our third quarter results. Kevin will provide a more in-depth discussion of our financial metrics. Venk will then provide a review of our balance sheet and cash flow and provide comments around our guidance and investor day. Finally, Bob will provide closing remarks, and then we will open up the call for questions. With that, I will turn it over to CEO Bob Pregatta.

Thank you, Ian. Good day, everyone, and thank you for joining us to discuss our third quarter fiscal year 2024 business performance. I'm joined today by my special advisor, Kevin Berryman, who acted as interim CFO into June and will therefore report out financials. I'm delighted to also welcome our new CFO, Venk Nathamuni, on his first earnings call for Jacobs. Venk joined us in June and will provide details on guidance. Venk brings a wealth of knowledge and expertise from his 30 plus year career. and I am excited to work in partnership with him moving forward. Kevin will continue in his role as special advisor to me to drive a successful conclusion to the separation and merger of our critical mission solutions and cyber intelligence businesses with Amentum. I'd like to extend my gratitude for Kevin for his ongoing support. Now moving to slide four. We continue to make progress on our strategic shift toward a simpler, higher value, higher margin portfolio and remain confident in driving margin expansion over the coming years. Turning to slide five, I am pleased to report significant progress on the previously announced planned spinoff of our critical mission solutions and cyber intelligence businesses. An updated form 10 was publicly filed yesterday with the U.S. Securities and Exchange Commission. This filing, made under Amazon Holdco Inc., includes important business and financial information about the intended merger with Amentum to create a leading publicly traded global government services provider. Amentum will provide additional details during their capital markets day on Tuesday, August 13th, 2024. The transaction is now anticipated to be completed in the second half of September 2024. Turning to slide six and Q3. I will now share our third quarter achievements highlighted by strong backlog growth, consolidated margin expansion, and PMPS record backlog and strong adjusted operating margin. This period saw a continuation of a mixed shift to higher margin science-based consulting and advisory services that offers significantly higher returns, contributing to an overall margin expansion, notably led by PMPS and our partnership with PA Consulting. We are seeing an accelerating demand for critical infrastructure, particularly in water, environmental, and advanced facilities and markets, which are poised for substantial growth. Consolidated backlog increased 6% year over year, bolstering confidence that our business will accelerate profitable growth as we strategically shift our portfolio to higher value, higher margin solutions. Our consolidated adjusted EBITDA came in at $392 million, An increase of approximately 11% compared the same period last year and representing 11.5% adjusted EBITDA margin. From a cash perspective, we started the second half of the year by delivering very strong operating cash flow of $483 million and free cash flow of $445 million. We continue to expect exceeding 100% reported free cash flow conversion in fiscal year 2024 underscoring the power of our business model. Turning to slide seven. People and Places Solutions line of business reported another of solid top line growth, along with strong adjusted operating margins of 15.3% and adjusted operating profit growth of 12% year on year. We ended Q3 with a strong book to bill of 1.53 times and record backlog. Adjusted net revenue was up 5% year-over-year. Our pipeline remains robust, and we continue to expect solid PNPS organic revenue growth for Q4 fiscal year 24. I'm particularly pleased to report that during the quarter, we continue to deliver substantial wins in core sectors such as water, environmental, and advanced facilities, a testament to our robust market positioning, deep domain expertise, and long-term trusted client relationships. We achieved double-digit growth in our water and environmental markets with two-thirds of our water-related business focused in on high-value science-based consulting and advisory services driven by aging infrastructure and emerging PFAS regulations. Water continues to be a foundational element of our portfolio, exemplified by key wins across various geographies, reinforcing our global leadership in the sector. Europe, particularly the UK, has shown resilience, posting a robust quarter in water-related awards. In Asia, we were appointed by PUB, Singapore's national water agency, to engineer and program manage the new Cranji water reclamation plant, designed to enhance northern Singapore's water treatment capacity by 120 million imperial gallons per day. Additionally, our partnership with Onondaga County, the Syracuse metropolitan area in central New York, which began in 2008, continues as they've chosen us to provide program management services for their efforts in controlling increased combined sewer overflow and utilizes our digital one water solutions. This expansion will be critical in remediating aging water infrastructure and supporting industrial growth in the geography. We're excited by the continued momentum and pipeline build in our advanced facilities portfolio, predominantly driven by life sciences, semiconductor manufacturing, and AI chip driven data center expansion. Specifically in life sciences, we continue to see robust growth with our pipeline and revenue growing double digits year over year. Approximately two thirds of our life sciences related business is concentrated in high value science based consulting and advisory services. We were selected by Fujifilm DioSynth Biotechnologies to support the $1.2 billion expansion of their large scale biologics facility biologics manufacturing site in holly springs north carolina providing engineering procurement and program management services with the first phase of construction expected to complete in 2025. we continue to see a growing pipeline in transportation and energy and power supported by ongoing government stimulus as an example in transportation we were selected to provide program management services for broward county transportation department's first ever public transit expansion This $4.4 billion 30-year initiative will transform the county's transportation infrastructure into a multimodal transit system with a new light rail connecting Fort Lauderdale Hollywood International Airport to Port Everglades. Additionally, the quarter was highlighted by several key wins in the energy and sustainability space as demonstrated by our appointment as program manager for the Arches Hydrogen Consortium and Master Services Agreement with Shell Energy in Australia. PA Consulting delivered an industry-leading adjusted operating margin of 21.8% with robust execution and cost discipline. Our partnership with PA continues to be a differentiator in our science-based consulting and advisory services. Together with PA, we were selected in the Hertfordshire County UK to enhance the public highways network in the county, with services valued at approximately $22 million annually. This collaboration focuses on sustainability and aims to deliver long-term value over an initial five-year period with potential extensions up to 14 years. In Divergent Solutions, we are encouraged by the ongoing demand for our digitally-enabled infrastructure solutions that will remain with Independent Jacobs post-close. A testament to our capabilities is our recent selection by the City of Omaha to develop a data analytics and AI-enabled support system for its wastewater network utilizing Jacobs Digital One Water Solutions, AquaDNA. CMS delivered 35 basis points of margin expansion, the highest in 10 quarters, and has a strong pipeline. Additionally, we're experiencing encouraging trends that support long-term growth as we approach the merger with Amentum. In summary, we remain confident in our ability to win higher value, higher margin solutions, and deliver superior execution to meet our clients' expectations. Now I'll turn the call over to Kevin to review our financial results in further detail.