Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

J · Q1 2026 Earnings

Jacobs Solutions

Reported February 3, 2026

30-second summary

Jacobs opened FY26 with $3.29B revenue (+12.3% YoY), adjusted EPS of $1.53, and a 2.0x quarterly book-to-bill that drove backlog to a record $26.3B (+20.6% YoY). The FY26 EPS low end was lifted $0.05 to $6.95, the net revenue growth floor moved up 50 bps to 6.5%, and the FCF margin ceiling was raised 50 bps to 8.5% — but Q2 guidance of ~6.5% YoY net revenue growth and 13.8–14.0% EBITDA margin signals a step-down from Q1's pace, so the FY raises rest on H2 acceleration that has not yet been booked.

Headline numbers

EPS

Q1 FY2026

$1.53

Revenue

Q1 FY2026

$3.29B

+12.3% YoY

Gross margin

Q1 FY2026

23.2%

Free cash flow

Q1 FY2026

$0.36B

Operating margin

Q1 FY2026

7.1%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$3.29B	+12.3%	$3.15B	+4.4%
EPS	$1.53	—	$1.75	-12.6%
Gross margin	23.2%	—	24.3%	-110bps
Operating margin	7.1%	—	14.5%	-740bps
Free cash flow	$0.36B	—	$0.35B	+3.1%

Guidance

Company raised FY26 EPS low end and revenue growth low end on strong Q1 execution, raised FCF margin ceiling, while maintaining EBITDA margin guidance; Q2 forward guidance signals modest growth deceleration.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

Metric	Period	Guide	YoY
Adjusted EBITDA Margin	Q2 FY2026	13.8% to 14.0%	—
Year-over-Year Net Revenue Growth	Q2 FY2026	approximately 6.5%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY 2026	$6.90 to $7.30	$6.95 to $7.30	+$0.05 at low end	Raised
Adjusted Net Revenue Growth	FY 2026	6.0% to 10.0% year-over-year	6.5% to 10.0% year-over-year	+0.5pts at low end	Raised
Free Cash Flow Margin	FY 2026	7.0% to 8.0%	7.0% to 8.5%	+0.5pts at high end	Raised

Reaffirmed unchanged this quarter: Adjusted EBITDA Margin (14.4% to 14.7%)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Infrastructure & Advanced Facilities	$2.94B	+11.9%
PA Consulting	$0.35B	+16.0%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Total Backlog	$26.3B
YoY Backlog Growth	20.6%
Book-to-Bill Ratio (Q1)	2.0x
TTM Book-to-Bill Ratio	1.4x
Adjusted Net Revenue YoY Growth	8.2%
Adjusted EBITDA	$302.6M
Adjusted EBITDA Margin	13.4%
Free Cash Flow Margin	16.2%

Management tone

Q1 customer execution → Q2 backlog build → Q3 data center inflection → Q4 quantified FY26 framework → Q1 FY26 AI-as-bottom-line and PA full ownership.

Three quarters ago AI was framed as a long-term differentiator; two quarters ago as embedded in delivery; this quarter it is positioned as a quantified earnings driver. The CEO's anchor line from the call: "the ultimate test of the power of AI is coming through in our bottom line results. The schedules and the delivery model for these can't be done without the use of the AI platforms." The shift signals that the AI narrative no longer needs to be defended on principle — it is now being underwritten by the same backlog and margin arithmetic as the rest of the business.

The PA Consulting framing has moved through three distinct postures in three quarters: Q3 called it an "inflection," Q4 walked it back to "synergistic expansion" as growth decelerated to 10%, and this quarter it is reframed again — now as a strategic asset worth taking to 100% ownership. The CEO described PA as a "force multiplier... key accelerant in our strategy to redefine the asset lifecycle" and disclosed that the combined AI capability has doubled. PA growth re-accelerated to 16% in Q1, but the FY26 guide of "high single digits" tells you management is not betting the FY bridge on PA's top line — they are betting on the integration of PA's consulting overlay into the infrastructure franchise.

Private sector data center and semiconductor demand has shifted from emerging opportunity to participation-across-the-ecosystem. Where Q3 quantified 150+ data center engagements as evidence of footprint, this quarter the CEO went further on competitive durability: "I kind of talk about it from our participation across the ecosystem of, you know, call it the electron landscape... I don't know if I'm allowed to call it a moat, but I will." CEOs of engineering-services firms rarely use the word moat; the 2.0x Q1 book-to-bill and 20.6% YoY backlog growth give the language some support.

Environmental services has flipped from a Q3/Q4 headwind to a guided H2 inflection driven by Navy and Army Corps pipeline release, with the pipeline described as "up double digits." This is the first quarter in the visible series where environmental is positioned as a contributor rather than a drag, which is part of why FY26 net revenue growth low end could move up despite the Q2 deceleration.

The margin commentary has broadened from operational efficiency to mix shift plus global delivery plus commercial model. Management is now attributing the path from Q1's 13.4% to the 14.4–14.7% FY range to three concurrent levers (life sciences/advanced manufacturing mix, global delivery scaling, commercial model optimization) rather than the single-lever efficiency narrative used through FY25.

Recurring themes management leaned on this quarter:

AI as embedded project delivery differentiator and revenue accelerantPrivate sector (data centers, semiconductors, life sciences) as high-velocity growth engineAsset lifecycle redefinition through integrated EPCM and digital twin capabilitiesRecord backlog and multiyear project pipeline visibility enabling confidenceMargin expansion via mix shift and global delivery scalingPA Consulting integration as strategic multiplier for consulting and AI advisory

Risks management surfaced:

Government shutdown impact (mitigated but monitored)Environmental services recovery timing dependency on federal program releasesPass-through revenue mix in data center awards impacting reported profitabilityPA acquisition financing impact (net leverage temporarily above 1.5x target)Gestation period variability in transportation and energy project timelines

Answers to last quarter's watch list

Q1 FY26 FCF margin trajectory vs the 7.0–8.0% range — Q1 FCF margin came in at 16.2% on $365M of FCF, well above the FY range and prompting management to raise the ceiling to 8.5%. The flat-to-modest FY guide concern from Q4 has been resolved on the strength of the Q1 print, though the full year still depends on whether working-capital absorption returns in H2 as data center / infrastructure projects ramp.

Resolved positively

PA Consulting Q1 growth rate vs the 10% Q4 benchmark — PA grew 16.0% in Q1, re-accelerating sharply from Q4's 10.0% and validating the "synergistic expansion" framing. That said, FY26 PA growth is guided to "high single digits," so Q1 is being positioned as the high-water mark rather than a sustained re-acceleration.

Resolved positively

Book-to-bill trajectory after Q4's 1.1x TTM compression — TTM book-to-bill stepped up to 1.4x, with Q1 alone at 2.0x driven by large life sciences and advanced manufacturing awards. The Q4 erosion concern is fully resolved; backlog is now $26.3B (+20.6% YoY), giving the strongest forward coverage in the visible series.

Resolved positively

Refreshed data center engagement count and quantified revenue contribution — Management did not refresh the 150+ engagement count from Q3 and did not quantify a data center revenue line item, but the CEO leaned harder on the "ecosystem" and "moat" framing and tied the Q1 book-to-bill strength to private-sector awards including data centers. The qualitative narrative strengthened; the disclosure framework did not.

Continue monitoring

Where in the $6.90–$7.30 FY26 EPS range management is anchoring at Q1 — The low end was raised $0.05 to $6.95, the high end held at $7.30, and the midpoint moved to $7.125 — a modest first raise consistent with the FY25 pattern of two hikes. Management has not yet anchored above midpoint, leaving room for a Q2 or Q3 raise if H2 acceleration arrives as described.

Resolved positively

Adjusted EBITDA margin path vs the 14.4–14.7% FY guide — Q1 came in at 13.4%, below the FY range, which is consistent with seasonal Q1 softness; Q2 is guided to 13.8–14.0%, still below the FY range. The FY guide was reaffirmed, not raised, which is a quieter signal than the EPS and revenue raises — margin expansion remains the conditional element of the FY26 bridge.

Continue monitoring

What to watch into next quarter

Q2 actual EBITDA margin vs the 13.8–14.0% guide: a print at the high end or above signals the H2 ramp toward 14.4–14.7% is achievable; a low-end or below print puts the unchanged FY margin guide at risk while EPS and revenue have already been raised.

Q2 net revenue growth vs the ~6.5% YoY guide — the FY low end implies H2 needs to track materially above 6.5% to hit even 6.5% for the full year given Q1's 8.2%; watch whether environmental services and PA together carry the H2 acceleration management is implying.

TTM book-to-bill after the 1.1x → 1.4x step up: sustaining above 1.2x would lock in FY27 visibility well before the typical Q4 framework reveal; a snap back below 1.2x would suggest the Q1 2.0x was a timing artifact rather than a run rate.

PA Consulting growth deceleration toward the "high single digits" FY guide — a Q2 print in the low double digits is consistent with the guide; anything at high single digits or below in Q2 would imply Q1's 16% was the entire FY26 PA contribution arriving in one quarter.

Disclosed cost synergy phasing on the PA full-acquisition: management has telegraphed $16–20M phasing into FY26 — watch for a specific quarterly cadence at Q2 and whether the accretion math holds against the temporary net leverage above 1.5x.

Whether management refreshes the 150+ data center engagement count or introduces a quantified data center / private-sector revenue contribution — the disclosure framework has been static for two quarters now while the narrative weight on the segment has grown.

Sources

Jacobs Solutions Q1 FY2026 Earnings Release, SEC filing — https://www.sec.gov/Archives/edgar/data/52988/000162828026005001/jfy2026q1earningsrelease.htm

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