Jacobs Solutions Inc.

comments here on end market trends, cash flow, and balance sheet data. Finally, Bob will provide closing remarks, and then we'll open up the call for questions. With that, I'll turn it over to our chair and CEO, Bob Pergata.

Good afternoon, everyone, and thank you for joining us to discuss our first quarter 2026 business performance. We delivered very strong results for Q1, exceeding our expectations across all key metrics and made incremental progress toward achieving our FY29 targets. I'll quickly highlight a few key takeaways. First, adjusted EPS grew 15% to $1.53, supported by robust 8% net revenue growth and solid underlying margin performance. Second, our backlog grew 21% to over $26 billion, setting a new record, with our trailing 12-month book to bill rising to 1.4 times. And third, we announced an agreement with the shareholders of PA Consulting to acquire the remaining stake in the company. We see PA's core competencies in digital consulting, innovation, and AI advisory as a force multiplier for Jacobs and a key accelerant in our strategy to redefine the asset lifecycle. In summary, we are exiting Q1 with momentum, and this strong start to the year gives us confidence to increase our FY26 outlook, for net revenue, adjusted EPS, and free cash flow margin, which Fink will go through in detail shortly. Turning to slide four, we provide a detailed overview of our quarterly results. We are very pleased with Q1 results as a strong operating performance paired with our lower share count drove the fourth straight quarter of double-digit growth in adjusted EPS. During Q1, we also reported a substantial increase in our quarterly book-to-bill to 2.0 times, positioning us well for the rest of FY26 and beyond. Turning to slide five, I'd like to highlight a few notable INAF project awards for the first quarter. Q1 included several marquee wins that reflect the breadth of our capabilities and the strength of demand across our end markets. Starting with water and environmental, we were selected to lead the engineering design for the Bolivar Roads Gate System along the Texas Gulf Coast. Spanning the narrow strait connecting the Gulf to Galveston Bay, this project is expected to be among the largest storm surge barriers in the world. Once completed, it will help protect more than 6 million people while safeguarding businesses and maintaining operations along the Houston Ship Channel, a critical energy corridor. This major program underscores our leadership in delivering complex and high-impact water infrastructure focused on long-term resilience. In life sciences and advanced manufacturing, we were selected to provide engineering, procurement, and program management services for HUD-8's Riverbend Data Center in Louisiana, a flagship AI and high-performance computing project. The facility is poised to be one of the largest of its kind in North America. The region's power-dense utility infrastructure enables the speed, reliability, and flexibility required for next-generation AI workloads. This project demonstrates how we're leveraging our deep domain expertise in data centers, power, water, and digital twin technology to deliver increasingly complex facilities. In critical infrastructure, we continue to secure high-value, mission-critical programs that underscore the strength of our combined Jacobs and PA consulting capabilities. Notably, in the UK, the health security agency selected PA, supported by Jacobs, to act as delivery partner in its TRUST program, an initiative focused on strengthening resilience and safeguarding critical health data and infrastructure. Through advisory, technical, and delivery support, we'll help the agency meet data security and cyber requirements, ensuring the systems that underpin public health and emergency response remain resilient and secure. This award reflects the growing demand for our integrated consulting and delivery approach and reinforces our role in supporting some of the UK government's most critical priorities. Also within critical infrastructure, we were selected to lead program and construction management services for the $1.6 billion modernization of Cleveland Hopkins International Airport. The program will modernize aging infrastructure and improve accessibility and passenger flow at Ohio's busiest airports. Jacobs is ranked as engineering news records number one firm in aviation, a sector where we continue to see significant growth in demand for terminal upgrades, master planning for new builds, digital implementation, and AI advisory. In summary, we are deepening our relationship with key clients, which is driving multifaceted multi-year program wins as demonstrated by our significant backlog growth in the quarter. Now I'll turn the call over to Venk to review our financial results in further detail.

Thank you, Bob, and good afternoon, everyone. I'd like to echo Bob's earlier comments on our announcement to acquire the remaining stake in PA Consulting. Our partnership over the last five years has truly differentiated our approach to our client's business, and we look forward to accelerating the integration of our combined offering. A year ago at our investor day, we talked about the power of focus. and increasing our ownership in PA consulting to 100% will support our goal to simplify our structure, execute on our strategy, and produce predictable high-quality earnings over the long term. Now, please turn to slide number six, where I'll walk through our results for Q1. In the first quarter, gross revenue increased 12% year-over-year, and adjusted net revenue, which excludes pass-through revenue, grew by more than 8%. Q1 adjusted EBITDA was $303 million, growing more than 7%, with our margin coming in about 13.4%. Recall that last year during Q1, we absorbed less PTO than anticipated, resulting in a margin tailwind that did not recur this year. Overall, adjusted EPS rose 15% year-over-year a great start to fiscal year 26. Consolidated backlog was up 21% year over year to a record $26.3 billion, with our trading 12-month book-to-bill rising to 1.4 times. Book-to-bill was particularly strong in Q1, driven in part by several large awards in the life sciences and advanced manufacturing end markets. We expect these awards to contribute positively to net revenue growth through fiscal year 26 and beyond, but do note that they carry higher than normal pass-through revenue. Importantly, gross profit in backlog, which would not be impacted by this pass-through dynamic, increased 15% year-over-year during Q1, highlighting the underlying strength of our sales performance. Regarding our performance by end market and infrastructure and advanced facilities, Let's now turn to slide number seven. At a high level, all of our end markets performed well during the quarter, with strong revenue growth in life sciences and advanced manufacturing and critical infrastructure within INAF, as well as PA consulting. As a result, we finished above the high end of our Q1 forecast for enterprise net revenue growth. Focusing in on life sciences and advanced manufacturing, Net revenue grew 10% in Q1, a nice improvement from Q4, as programs in our advanced manufacturing vertical ramp up. As we have noted in past quarters, strong award activity in both the data center and semiconductor sectors is now helping drive higher growth. Additionally, we continue to see favorable trends in life sciences, and this combination positions us well for the remainder of the year. Our current expectation is that growth in this end market will lead INAF in fiscal year 26 as programs ramp up during the second half of the year. Shifting now to critical infrastructure, net revenue increased 8% over Q1 2025. Critical infrastructure is performing well across the board with robust growth in transportation, particularly in rail and aviation, driving strong overall growth for the end market. Net revenue growth in our water and environmental end market increased sequentially to 4%, driven by high single-digit growth in water and a modest easing of headwinds in environmental. We forecast year-on-year performance for environmental will improve as we move into the second half of the fiscal year. In summary, we performed well across our end markets during Q1, and we believe we are positioned nicely for the remainder of fiscal year 26 and beyond. Now, moving on to slide number eight, I'll provide a brief overview of our segment financials. In Q1, INAF operating profit increased modestly year on year with similar constant currency performance. PA consulting operating profit increased 27% on 16% revenue growth and a strong operating margin of 24%. On a constant currency basis, operating profit grew 22%. PA continues to benefit from rising demand for digital consulting and advisory services in the public, national security, and energy sectors. As we look ahead, we expect PA's revenue growth to remain solid with fiscal year 26 tracking in the high single digit range year on year. Moving on to slide nine, we provide an overview of cash generation and our balance sheet. For Q1, free cash flow came in at $365 million, supported by solid working capital performance, as well as a favorable cash timing item at the end of the quarter that will reverse in Q2. Excluding this timing item, underlying free cash flow performance was still very strong and gives us confidence to raise our full-year free cash flow outlook, which I'll discuss shortly. Focusing in on capital returns, we increased our share repurchase quantum during Q1 to take advantage of the dislocation in our shares in the second half of the quarter. As a result, we're starting the year well on our way to returning at least 60% of our free cash flow to shareholders. Additionally, we announced last week that we will be raising our quarterly dividend from 32 cents to 36 cents a share, a 12.5% increase. We have now more than doubled our quarterly dividend per share since 2019. Additionally, our net leverage ratio currently stands just below 0.8 times on LTM adjusted EBITDA, which is well below our 1.0 to 1.5 times target range. Our balance sheet strength has enabled us to increase share repurchases, raise our quarterly dividend, and enter into an agreement to purchase the remaining stake in PA Consulting. The acquisition of the remaining stake in PA will raise our net leverage to slightly above the high end of our 1.0 to 1.5 times target range upon closing, but we expect to return to the target range within a year. Finally, please turn to slide number 10 for our updated fiscal year 26 outlook. We're increasing our forecast for adjusted net revenue growth, adjusted EPS growth, and free cash flow margin relative to our guidance from last quarter. We're increasing our fiscal year 26 net revenue range to 6.5% to 10% year-over-year, adjusted EPS range to $6.95 to $7.30, and free cash flow margin range to 7% to 8.5%. Our expectation remains unchanged for an adjusted EBITDA margin range of 14.4% to 14.7%. Notably, our outlook for fiscal year 26 implies over 16% year-on-year growth in adjusted EPS at the midpoint. We provide relevant assumptions on the right side of the page to help with your modeling. Please note that our guidance does not reflect the announced acquisition of the remaining stake in PA Consulting, and we plan to update our outlook once the deal closes, likely with our Q2 results in May. Based on current assumptions, we expect the acquisition to be accretive to adjusted EPS in the first 12 months following closing. We anticipate the $16 million to $20 million in projected cost synergies will begin to face in during fiscal year 26, with revenue synergies providing incremental upside. As it pertains to Q2, we expect our adjusted EBITDA margin to be in the range of 13.8% to 14% with year-over-year net revenue growth of approximately 6.5%. In summary, we're off to a great start in Fiscal Year 26 and remain focused on strong execution, profitable growth, and continued capital returns. With that, I'll turn the call back over to Bob.