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Item 2 — Management's Discussion and Analysis
Jacobs Solutions Inc. · 10-Q · Q3 FY2026 · Period ended Jun 26, 2026
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General
The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition from the most recent fiscal year-end to June 26, 2026 and (ii) results of operations during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year. In order to better understand such changes, readers of this MD&A should also read:
•The discussion of the critical and significant accounting policies used by the Company in preparing its consolidated financial statements. The most current discussion of our critical accounting policies appears in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2025 Form 10-K, and the most current discussion of our significant accounting policies appears in Note 2- Significant Accounting Polices in Notes to Consolidated Financial Statements of our 2025 Form 10-K;
•The Company’s fiscal 2025 audited consolidated financial statements and notes thereto included in our 2025 Form 10-K; and
•Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Form 10-K.
In addition to historical information, this MD&A and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as “expects,” “anticipates,” “believes,” “seeks,” “estimates,” “plans,” “intends,” “future,” “will,” “would,” “could,” “can,” “may,” "target," "goal" and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make concerning the financial condition and results of operations and our expectations as to our trajectory and momentum and future growth, prospects, financial outlook and business strategy and any assumptions underlying any of the foregoing. Although such statements are based on management’s current estimates and expectations, and/or currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain, and you should not place undue reliance on such statements as actual results may differ materially. We caution the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, projected or implied by our forward-looking statements. Such factors include but are not limited to:
•general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets and stock market volatility, instability in the banking industry, labor shortages, or the impact of a possible recession or economic downturn or changes to monetary or fiscal policies or priorities in the U.S. and the countries where we do business on our results, prospects and opportunities;
•competition from existing and future competitors in our target markets, as well as the possible reduction in demand for certain of our product solutions and services, including delays in the timing of the award of projects or reduction in funding, or the abandonment of ongoing or anticipated projects due to the financial condition of our clients and suppliers or due to governmental budget constraints or changes to governmental budgetary priorities, or the inability of our clients to meet their payment obligations in a timely manner or at all;
•our ability to fully execute on our corporate strategy, including the impact of acquisitions (including the PA Consulting Transaction (as hereinafter defined), strategic alliances, divestitures, and other strategic events resulting from evolving business strategies, including on our ability to maintain our culture and retain key personnel, customers or suppliers, or our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, and our ability to invest in and effectively deploy and use the tools, technologies and capabilities needed to implement our strategy, including artificial intelligence and other emerging technologies, and to manage the operational, legal, regulatory, cybersecurity, data privacy and reputational risks associated with the use of such technologies;
•financial market risks that may affect us, including by affecting our access to capital, the cost of such capital and/or our funding obligations under defined benefit pension and post-retirement plans;
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•legislative changes, including potential changes to the amounts provided for under the Infrastructure Investment and Jobs Act, as well as other legislation and executive orders, including any directive to federal agencies to reduce federal spending or the size of the federal workforce, and changes in U.S. or foreign tax laws, including the OBBBA, statutes, rules, regulations or ordinances, including the impact of, and changes to, tariffs and retaliatory tariffs or trade policies that may adversely impact our future financial position or results of operations;
•increased geopolitical uncertainty and risks, including policy risks and potential civil unrest, relating to the outcome of elections across our key markets and elevated geopolitical tension and conflicts, including the Russia-Ukraine conflict and on-going, escalated and/or future tensions and conflicts in the Middle East, among others; and
•the impact of any pandemic, and any resulting economic downturn on our results, prospects and opportunities, measures or restrictions imposed by governments and health officials in response to the pandemic, as well as the inability of governments in certain of the countries in which we operate to effectively mitigate the financial or other impacts of any future pandemics or infectious disease outbreaks on their economies and workforces and our operations therein.
The foregoing factors and potential future developments are inherently uncertain, unpredictable and, in many cases, beyond our control. For a description of these and additional factors that may occur that could cause actual results to differ from our forward-looking statements, see the Company’s filings with the U.S. Securities and Exchange Commission, including in particular the discussions contained in our fiscal 2025 Form 10-K under Item 1 - Business, Item 1A - Risk Factors, Item 3 - Legal Proceedings, and Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations; and in this Quarterly Report on Form 10-Q under Part I, Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 1 - Legal Proceedings and Item 1A - Risk Factors. We undertake no obligation to release publicly any revisions or updates to any forward-looking statements. We encourage you to read carefully the risk factors, as well as the financial and business disclosures contained in this Quarterly Report on Form 10-Q and in other documents we file from time to time with the United States Securities and Exchange Commission (the "SEC").
Business Overview
At Jacobs, our values and our brand promise — Challenging today. Reinventing tomorrow — drive us to deliver innovative solutions and sustainable outcomes for the world’s most complex challenges.
With a global team of approximately 47,000, we provide end-to-end capabilities across advanced manufacturing, cities & places, energy, environmental, life sciences, transportation and water. Our services span strategy and advisory, feasibility and planning, design, program delivery and lifecycle management — helping create a more connected and sustainable world.
Together we transform advanced manufacturing and life sciences facilities, reimagine transportation networks, secure water and energy systems, and shape the environments where people live and work. By combining strategic advisory, digital innovation and delivery expertise, we help clients solve today's most urgent challenges while preparing for tomorrow's opportunities.
Over the past eight years, Jacobs has transformed into a science-based consulting and advisory leader, delivering digitally enabled, resilient solutions to complex sustainability, critical infrastructure and advanced manufacturing challenges. Strategic acquisitions, including PA Consulting Group Limited ("PA Consulting"), along with the digital and data business solutions acquired with the BlackLynx and StreetLight acquisitions — have strengthened our capabilities in high-value technology-enabled solutions.
In February 2025, we launched Challenge Accepted, our multi-year growth strategy designed to sharpen focus and accelerate our performance. Aligned with our long-term financial framework, this strategy positions us to drive profitable growth and deliver scalable, full lifecycle solutions across water and environmental, life sciences and advanced manufacturing, and critical infrastructure.
As global challenges, including urbanization, infrastructure modernization, digital transformation and environmental resilience, intensify, we bring together strategy, innovation and delivery across our end markets to help clients solve increasingly complex challenges. This connected approach enables scalable execution, enhances resilience and helps clients adapt to evolving needs.
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We harness data, digital platforms and artificial intelligence (AI)-enabled solutions to help clients operate more efficiently, safely and intelligently. Through the expertise of our people and continued investment in AI and next-generation technologies, we empower our clients' decision-making across the asset lifecycle — from planning and design to operations, cybersecurity and operational technology. Our capabilities in data analytics, digital architecture, advisory and transformation, software development and cybersecurity enable clients to unlock greater value from their digital infrastructure while improving resilience and performance.
In March 2026, we acquired full ownership of PA Consulting. Full ownership of PA Consulting strengthens our position as a comprehensive partner delivering integrated advisory and technology-enabled solutions at global scale. By bringing together strategy, digital innovation and major program delivery, we are better positioned to support clients across the full project lifecycle — from early-stage strategy to implementation — enabling them to address complex challenges with greater speed, capital efficiency and confidence.
Operating Segments
The services we provide to our end markets fall into the following two operating segments: 1) Infrastructure & Advanced Facilities and 2) PA Consulting. For additional information regarding our segments, including information about our financial results by segment and financial results by geography, see Note 18- Segment Information and Note 5- Revenue Accounting for Contracts of Notes to Consolidated Financial Statements.
Infrastructure & Advanced Facilities (I&AF)
Jacobs' Infrastructure & Advanced Facilities operating segment provides integrated, end-to-end solutions for our clients’ most complex challenges across advanced manufacturing, cities & places, digital infrastructure, energy, environmental, life sciences, transportation and water. We combine deep expertise in Water & Environmental, Life Sciences & Advanced Manufacturing and Critical Infrastructure. Our core capabilities span consulting, planning, architecture, design, engineering, project delivery, including project, program and construction management, and the long-term operation of facilities. We deliver solutions through standalone professional services engagements, integrated program management partnerships, and selective progressive design-build and construction management-at-risk delivery services. Increasingly, we integrate digital, data and technology-enabled capabilities to help clients improve performance and deliver positive, enduring outcomes for communities.
We serve national, state and local government clients across multiple regions — including the U.S., U.K., Europe, the Middle East and Asia Pacific, as well as multinational and local private sector organizations globally.
PA Consulting
PA Consulting is a global innovation and transformation consultancy that helps accelerate new growth ideas from concept, through design and development, to commercial success, while supporting organizations in strengthening leadership, culture, systems and processes to make innovation a reality. PA Consulting supports clients across seven sectors: consumer and manufacturing, defense and security, energy and utilities, financial services, government, health and life sciences, and transport.
PA Consulting serves a diverse mix of private and public sector clients, bringing advisory, digital innovation and program delivery together by integrating PA Consulting's strengths in strategic advisory, innovation and transformation with Jacobs' expertise in delivering advanced manufacturing and highly technical infrastructure programs. Together, we can support clients across the full project lifecycle—from early-stage strategy through implementation—delivering practical, scalable solutions to address complex challenges.
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Separation of Critical Mission Solutions (CMS) and Cyber & Intelligence (C&I)
On September 27, 2024, Jacobs Solutions Inc. ("Jacobs") completed the previously announced Reverse Morris Trust transaction pursuant to which (i) Jacobs first transferred its Critical Mission Solutions business (“CMS”) and portions of the Divergent Solutions (“DVS”) business (referred to herein as the Cyber & Intelligence business (“C&I”) and together with CMS referred to as the “SpinCo Business”), to Amazon Holdco Inc., a Delaware corporation, which has been renamed Amentum Holdings, Inc. (“SpinCo”) (the “Separation”), (ii) Jacobs then effectuated a spin-off of SpinCo by distributing 124,084,108 shares of SpinCo common stock, par value $0.01 per share (the “SpinCo Common Stock”), by way of a pro rata distribution to its shareholders such that each holder of shares of Jacobs common stock, par value $1.00 per share (the “Jacobs Common Stock”) was entitled to receive one share of SpinCo Common Stock for each share of Jacobs common stock held as of the record date, September 23, 2024 (the “Distribution”), and (iii) finally, Amentum Parent Holdings LLC merged with and into SpinCo, with SpinCo surviving the merger (the “Merger” and together with the Separation and the Distribution, the “Separation Transaction”). The surviving entity of the Separation Transaction is now an independent public company with common stock listed on the New York Stock Exchange under the symbol “AMTM” (“Amentum”).
As a result of the Separation Transaction, substantially all SpinCo Business-related assets and liabilities have been separated and distributed (the "Disposal Group"). The Company determined that the Disposal Group should be reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations because their disposal represents a strategic shift that had a major effect on operations and financial results. As such, the financial results of the SpinCo Business are reflected in our Consolidated Statements of Earnings as discontinued operations for all periods presented.
For further information regarding separation activities that took place subsequent to the Separation Transaction closing, see Note 14- Discontinued Operations.
Prior to the Separation Transaction, Jacobs’ Critical Mission Solutions business provided a full spectrum of solutions for clients to address evolving challenges like digital transformation and modernization, national security and defense, space exploration, digital asset management, the clean energy transition, and nuclear decommissioning and cleanup. Clients included government agencies, as well as private sector clients mainly in the aerospace, automotive, motorsports, energy and telecom sectors. Prior to the Separation Transaction, the DVS business unit served as the core foundation for developing and delivering innovative, next-generation cloud, cyber, data and digital technologies. DVS clients included government agencies and commercial clients in the U.S. and international markets. Certain portions of the DVS business related to advising on digital strategy and transformation and developing digital solutions that facilitate capital, operational and cybersecurity decisions for our clients across our segments and their end markets were retained and are now part of I&AF.
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Results of Operations for the three and nine months ended June 26, 2026 and June 27, 2025
(in thousands, except per share information)
For the Three Months Ended For the Nine Months Ended
June 26, 2026 June 27, 2025 June 26, 2026 June 27, 2025
Revenues $ 4,076,410 $ 3,031,768 $ 11,064,572 $ 8,875,139
Direct cost of contracts (3,265,707) (2,273,358) (8,693,726) (6,657,118)
Gross profit 810,703 758,410 2,370,846 2,218,021
Selling, general and administrative expenses (524,000) (523,396) (1,932,758) (1,565,942)
Operating Profit 286,703 235,014 438,088 652,079
Other Income (Expense):
Interest income 8,306 8,297 25,235 27,478
Interest expense (54,652) (37,051) (129,981) (110,451)
Loss on extinguishment of debt — — — (20,510)
Miscellaneous income (expense), net 890 38,844 (16,480) (194,523)
Total other (expense) income, net (45,456) 10,090 (121,226) (298,006)
Earnings from Continuing Operations Before Taxes 241,247 245,104 316,862 354,073
Income Tax Expense from Continuing Operations (104,635) (53,752) (132,656) (161,477)
Net Earnings of the Group from Continuing Operations 136,612 191,352 184,206 192,596
Net Loss of the Group from Discontinued Operations, net of tax (806) (1,629) (3,142) (8,180)
Net Earnings of the Group 135,806 189,723 181,064 184,416
Net Loss (Earnings) Attributable to Noncontrolling Interests from Continuing Operations 747 (4,442) 9,170 1,209
Net (Earnings) Loss Attributable to Redeemable Noncontrolling Interests — (5,676) 25,943 (18,539)
Net Earnings Attributable to Jacobs from Continuing Operations 137,359 181,234 219,319 175,266
Net Loss Attributable to Jacobs from Discontinued Operations (806) (1,629) (3,142) (8,180)
Net Earnings Attributable to Jacobs $ 136,553 $ 179,605 $ 216,177 $ 167,086
Net Earnings Per Share:
Basic Net Earnings from Continuing Operations Per Share $ 1.17 $ 1.56 $ 1.98 $ 1.54
Basic Net Loss from Discontinuing Operations Per Share $ (0.01) $ (0.01) $ (0.03) $ (0.07)
Basic Earnings Per Share $ 1.16 $ 1.55 $ 1.95 $ 1.47
Diluted Net Earnings from Continuing Operations Per Share $ 1.16 $ 1.56 $ 1.96 $ 1.53
Diluted Net Loss from Discontinuing Operations Per Share $ (0.01) $ (0.01) $ (0.03) $ (0.07)
Diluted Earnings Per Share $ 1.15 $ 1.55 $ 1.94 $ 1.46
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Overview – Three and Nine Month Periods Ended June 26, 2026
Net earnings attributable to the Company from continuing operations for the third fiscal quarter of 2026 was $137.4 million (or $1.16 per diluted share), a decrease of $43.9 million, from net earnings of $181.2 million (or $1.56 per diluted share) for the corresponding period last year. Favorable period over period underlying operating performance was seen in the third fiscal quarter of 2026, resulting from higher gross profit of $52.3 million compared to the corresponding period last year, primarily driven by stronger performance in our Infrastructure & Advanced Facilities ("I&AF") operating segment (mainly in our Global Operations, International and Americas sectors as discussed further below in the Segment Financial Information section). Reported net earnings for the third fiscal quarter of 2026 were also favorably impacted by a decrease in restructuring and other charges associated with the Separation Transaction compared to the fiscal 2025 period (mainly professional services and employee separation costs, discussed in Note 16- Restructuring and Other Charges), which was offset by a $10.8 million increase in restructuring and other charges incurred in connection with the PA Consulting Transaction, as well as an increase in incentives and personnel related costs. The above net favorable impacts to our results were partly offset by a decrease in miscellaneous income of $38.0 million, primarily due to the absence of prior year 2025 mark-to-market gains of $27.4 million related to our former investment in Amentum stock in connection with the Separation Transaction, and higher income tax expense of $50.9 million primarily from non-deductible expenses associated with the PA Consulting Transaction which closed on March 20, 2026, impacting the Company's annualized effective tax rate for the remainder of the fiscal year. Our results were further favorably impacted by the absence of $5.7 million in the Company's prior redeemable noncontrolling share of expense associated with equity-based incentive grants as a result of the PA Consulting Transaction.
For the nine months ended June 26, 2026, net earnings attributable to the Company from continuing operations were $219.3 million (or $1.96 per diluted share), an increase of $44.1 million, from net earnings of $175.3 million (or $1.53 per diluted share) for the corresponding period last year. Our reported net earnings for the nine months ended June 26, 2026 were favorably impacted by higher gross profit of $152.8 million compared to the corresponding period last year, primarily driven by stronger performance in our Infrastructure & Advanced Facilities ("I&AF") operating segment (mainly in our Global Operations, International and Americas sectors, as discussed further below in the Segment Financial Information section). These favorable operating results were offset by $366.8 million in unfavorable increases in Selling, general and administrative ("SG&A"), primarily driven by expenses associated with the PA Consulting Transaction, including $217.0 million in incremental expense mainly from the full vesting of remaining equity-based incentive grants, incremental compensation costs of $123.9 million in distributions associated with the PA Consulting employee benefit trust, and other incentives, as well as $15.7 million in restructuring and other charges incurred in connection with the PA Consulting Transaction. Also, these results were favorably impacted by a decrease in miscellaneous expense of $178.0 million primarily due to the absence of prior year 2025 mark-to-market losses of $227.3 million related to our former investment in Amentum stock in connection with the Separation Transaction as well as the absence of prior year $20.5 million in discounts and expenses recorded to Loss on extinguishment of debt associated with our Equity-for-Debt Transaction on March 13, 2025 (see Note 12- Borrowings and Note 14- Discontinued Operations), partially offset by $20.5 million in losses on the settlement of the foreign exchange forward contract in connection with the PA Consulting Transaction, higher net interest expense and losses from foreign currency remeasurement in our current year results. Our results were also impacted by lower income tax expense of $28.8 million and a $44.5 million decrease in the Company's redeemable noncontrolling share of expense associated with equity-based incentive grants compared to the prior year period as mentioned above, partly offset by higher underlying net earnings results in our PA Consulting segment.
For discussion of discontinued operations, see Note 14- Discontinued Operations.
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On January 2, 2026, Jacobs entered into the Implementation Deed with PA Consulting. Pursuant to the Implementation Deed and certain related agreements, and in accordance with the terms and conditions thereof, on March 20, 2026, Jacobs completed the transaction to acquire from shareholders of PA Consulting all of the remaining issued share capital of PA Consulting ("PA Shares") owned by the PA Consulting shareholders (excluding shares already held by Jacobs and its affiliates). The Company acquired the PA Shares for an aggregate initial consideration of approximately £1.21 billion which was paid through a combination of approximately £997.6 million in cash (net of certain PA Consulting shareholder expenses) and 2,043,537 newly issued shares of Jacobs' common stock, par value $1.00 per share (“Company Common Stock”). Also, in accordance with the terms of the Implementation Deed, in fiscal 2028, the Company is obligated to pay an additional £75 million in consideration with shares of Company Common Stock, cash or a combination thereof (as determined by the Company in its sole discretion), with accruals associated with this additional consideration reflected in Other deferred liabilities on the Consolidated Balance Sheet as of June 26, 2026. The transactions described in this paragraph, are collectively referred to as the “PA Consulting Transaction”. As a result of the PA Consulting Transaction, the Company no longer carries Redeemable Noncontrolling Interests on the Jacobs Consolidated Financial Statements. See Note 15- PA Consulting Redeemable Noncontrolling Interests for more discussion on the transaction and Note 12- Borrowings for more discussion on the financing for the transaction.
Consolidated Results of Operations
Revenues for the third fiscal quarter of 2026 were $4.08 billion, an increase of $1.04 billion, or 34.5%, from $3.03 billion for the corresponding period last year. For the nine months ended June 26, 2026, revenues were $11.06 billion, an increase of $2.19 billion, or 24.7%, from $8.88 billion for the corresponding period last year. Revenue increases for both the three and nine month periods year over year were mainly driven by the Company's I&AF business, as well as revenue growth in our PA Consulting business in the nine month period of fiscal 2026. The I&AF segment benefited primarily from stronger performance in our Global Operations, International and Americas sectors for both the quarterly and year to date comparative periods presented. Our revenues were also favorably impacted by foreign currency translation of $21.0 million and $136.4 million for the three and nine months ended June 26, 2026, respectively, across our international businesses, as compared to favorable impacts of $37.2 million and $34.8 million for the for the three and nine months ended June 27, 2025, respectively.
Gross profit for the third fiscal quarter of 2026 was $810.7 million, an increase of $52.3 million, or 6.9%, from $758.4 million for the corresponding period last year, with gross profit margins of 19.9% and 25.0% for the respective periods. Gross profit for the nine months ended June 26, 2026 was $2,370.8 million, an increase of $152.8 million, or 6.9%, from $2,218.0 million for the corresponding period last year, with gross profit margins of 21.4% and 25.0% for the respective periods. The Company's increase in gross profit was mainly attributable to higher revenues as mentioned above, with overall margin impacts from higher revenues associated with pass-through cost, year-over-year project mix as well as lower utilization trends primarily in the PA Consulting business.
See Segment Financial Information discussion for further information on the Company’s results of operations at the operating segment.
Selling, general & administrative expenses for the three and nine months ended June 26, 2026 were $524.0 million and $1,932.8 million, respectively, as compared to $523.4 million and $1,565.9 million for the corresponding periods last year, representing an increase of $0.6 million or 0.1% and $366.8 million or 23.4%, respectively. SG&A expenses for the nine months ended June 26, 2026 were impacted by increases in expense associated with the PA Consulting Transaction, including $217.0 million in incremental expense compared to the last fiscal year period, mainly from the full vesting of remaining equity-based incentive grants, incremental compensation costs of $123.9 million in distributions associated with the PA Consulting Transaction employee benefit trust, and other incentives. The three and nine months ended June 26, 2026 also included an increase in restructuring, integration and other related costs associated with the PA Consulting Transaction of $10.8 million and $15.7 million, respectively. SG&A expenses were further impacted by increases in underlying personnel costs, incentives, expenses associated with IT related software licensing and other IT costs and other department spend. These incremental SG&A expenses were partly offset by decreases of $14.4 million and $29.6 million, respectively, in Restructuring and other charges associated with the Separation Transaction (mainly comprised of professional services and employee separation costs) and reductions of $4.7 million and $20.9 million, respectively, in expenses associated with the TSA with Amentum. Lastly, SG&A expenses were further impacted by unfavorable foreign exchange of $5.0 million and $50.8 million for the three and nine months ended June 26, 2026, as compared to unfavorable impacts of $6.2 million and $4.5 million for the corresponding periods last year.
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Net interest expense for the three and nine months ended June 26, 2026 was $46.3 million and $104.7 million, respectively, an increase of $17.6 million and $21.8 million from $28.8 million and $83.0 million or 61.2% and 26.2%, respectively, for the corresponding periods last year. The increase in net interest expense for the three and nine months ended June 26, 2026 was primarily a result of the Company's higher average levels of outstanding debt compared to the last fiscal year, partially offset by lower interest rates in the current year compared to the prior year period.
Loss on extinguishment of debt for the nine months ended June 27, 2025 was $20.5 million, in discounts and expenses associated with the Equity-for-Debt Transaction executed on March 13, 2025, where the Company exchanged shares of our former investment in Amentum Holdings, Inc. for a principal amount of term loans under the 2021 Term Loan Facility, which term loans were immediately extinguished. See Note 12- Borrowings and Note 14- Discontinued Operations.
Miscellaneous income (expense), net for the three and nine months ended June 26, 2026 was $0.9 million and $(16.5) million, respectively, in comparison to $38.8 million and $(194.5) million for the corresponding periods last year. The changes of $(38.0) million and $178.0 million for the three and nine months ended June 26, 2026, respectively, were primarily due to the absence of prior year mark-to-market gains (losses) and other related expenses associated with our former investment in Amentum stock in connection with the Separation Transaction of $27.4 million and $(227.3) million for three and nine month periods ended June 27, 2025, respectively. The three and nine months ended June 26, 2026 also included $6.2 million in net mark-to-market gains related to an investment in equity securities. Miscellaneous income (expense), net was also unfavorably impacted by a decrease of $9.8 million and $31.4 million for the three and nine months ended June 26, 2026, respectively, in TSA-related income associated with the Separation Transaction as discussed in Note 14- Discontinued Operations, as well as unfavorable comparative impacts of $7.0 million and $4.1 million, respectively, attributable to changes in net foreign currency remeasurement gains and losses arising from ordinary course of business activity. In addition, the current year's nine month results included $20.5 million in losses on the settlement of the foreign exchange forward contract in connection with the PA Consulting Transaction.
The Company’s effective tax rates from continuing operations for the three months ended June 26, 2026 and June 27, 2025 were 43.4% and 21.9%, respectively. Significant items contributing to differences between the statutory U.S. federal corporate tax rate of 21.0% and the Company's effective tax rate for the three-month period ended June 26, 2026 included $35.8 million of non-deductible expenses associated with the PA Consulting Transaction on March 20, 2026, $9.9 million of U.S. state income taxes and $6.3 million of U.S. tax on foreign earnings. These items are expected to have a continuing impact on the Company's effective tax rate for the remainder of the fiscal year.
The most significant items contributing to the difference between the statutory U.S. federal corporate tax rate of 21.0% and the Company's effective tax rate of 21.9% for the three-month period ended June 27, 2025 were related to U.S. state income tax expense and U.S. tax on foreign earnings, partly offset by additional research and development credits claimed on the U.S. federal tax return.
The Company’s effective tax rates from continuing operations for the nine months ended June 26, 2026 and June 27, 2025 were 41.9% and 45.6%, respectively. Significant items contributing to the difference between the statutory U.S. federal corporate tax rate of 21.0% and the Company's effective tax rate for the nine-month period ended June 26, 2026 included unfavorable tax impacts of $47.0 million of non-deductible expenses associated with the PA Consulting Transaction on March 20, 2026, $12.7 million of U.S. state income taxes and $9.0 million of U.S. tax on foreign earnings. These items are expected to have a continuing impact on the Company's effective tax rate for the remainder of the fiscal year.
The most significant item contributing to the difference between the statutory U.S. federal corporate tax rate of 21% and the Company's effective tax rate of 45.6% for the nine-month period ended June 27, 2025 were related to $63.1 million in unfavorable tax impacts associated with the non-deductibility of losses from the Company's investment in Amentum stock, as well as U.S. state income tax expense and U.S. tax on foreign earnings, partly offset by additional research and development credits claimed on the U.S. federal tax return.
Net loss attributable to noncontrolling interests for the three and nine months ended June 26, 2026 were $0.7 million and $9.2 million, respectively, as compared to net earnings of $(4.4) million and net loss of $1.2 million for the corresponding periods last year, due to lower comparative earnings results from our joint ventures in the current year period, partially offset by lower current period charges in connection with the Consolidated JV Matter.
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Net loss attributable to redeemable noncontrolling interests for the three and nine months ended June 26, 2026 were zero and $25.9 million, respectively, as compared to net earnings of $(5.7) million and $(18.5) million for the corresponding periods last year. The decrease in net earnings attributable to redeemable noncontrolling interests for the three months ended June 26, 2026 is primarily a result of the PA Consulting Transaction. The change for the nine months ended June 26, 2026 also reflects unfavorable impacts in the Company's noncontrolling share of expense associated with equity-based incentive grant vesting activities compared to the prior year period as discussed in Note 15- PA Consulting Redeemable Noncontrolling Interests, partly offset by higher net underlying earnings results in our PA Consulting segment compared to the prior year period.
Restructuring and Other Charges
During fiscal 2023, the Company implemented restructuring initiatives relating to the Separation Transaction. The Company incurred approximately $16.8 million during the nine months ended June 26, 2026 and $28.2 million and $42.0 million in fiscal 2025 and fiscal 2024, respectively, in pre-tax cash charges in connection with these initiatives. These actions are anticipated to be substantially completed at the end of fiscal year 2026 and are expected to result in estimated gross annualized pre-tax cash savings of approximately $200 million to $245 million.
During third quarter fiscal 2023, the Company approved a plan to improve business processes and cost structures of our PA Consulting investment by reorganizing senior management and reducing headcount. In connection with these initiatives, which are substantially completed, the Company incurred approximately $0.7 million during the nine months ended June 26, 2026 and $1.9 million, $6.4 million and $14.3 million in fiscal 2025, 2024 and 2023, respectively, in pre-tax cash charges. These activities are expected to result in estimated gross annualized pre-tax cash savings of approximately $50 million to $65 million.
During fiscal 2026, the Company implemented a new restructuring and integration initiatives program as a result of the PA Consulting Transaction, which closed on March 20, 2026. The Company incurred approximately $3.5 million during the nine months ended June 26, 2026 in pre-tax cash charges in connection with these initiatives. These activities are anticipated to continue through fiscal year 2028 and are expected to result in estimated gross annualized pre-tax cash savings of approximately $5 million to $10 million.
Refer to Note 16– Restructuring and Other Charges for further information regarding restructuring and integration initiatives.
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Segment Financial Information
The following tables present total revenues, direct cost of contracts, selling, general and administrative expenses and segment operating profit from continuing operations for each reportable segment (in thousands) and includes a reconciliation of segment operating profit to total U.S. GAAP operating profit from continuing operations by including certain corporate-level expenses, Restructuring and other charges (as defined in Note 16- Restructuring and Other Charges) and transaction and integration costs (in thousands) for the periods ended:
For the Three Months Ended For the Nine Months Ended
June 26, 2026 June 26, 2026
Infrastructure & Advanced Facilities PA Consulting Total Infrastructure & Advanced Facilities PA Consulting Total
Revenues from External Customers (1) $ 3,746,900 $ 329,510 $ 4,076,410 $ 10,022,055 $ 1,042,517 $ 11,064,572
Direct cost of contracts (3,037,800) (227,907) (3,265,707) (7,997,201) (696,525) (8,693,726)
Selling, general and administrative expenses (440,975) (27,960) (468,935) (1,316,765) (107,593) (1,424,358)
Segment Operating Profit (1) $ 268,125 $ 73,643 $ 341,768 $ 708,089 $ 238,399 $ 946,488
Restructuring, Transaction and Other Charges (2) (21,613) (402,889)
Amortization of Intangible Assets (33,452) (105,511)
Total U.S. GAAP Operating Profit $ 286,703 $ 438,088
Total Other (Expense) Income, net (3) (45,456) (121,226)
Earnings from Continuing Operations Before Taxes $ 241,247 $ 316,862
(1) The nine months ended June 26, 2026 I&AF revenue and operating profit in comparison to the corresponding periods for fiscal 2025 reflected lower charges in connection with the Consolidated JV Matter (as defined below).
(2) The nine months ended June 26, 2026 included $237.5 million in charges for certain subsidiary level compensation based agreements and $122.7 million primarily relating to consideration costs to specified PA Consulting employees which represent compensation expense in connection with the PA Consulting Transaction. The three and nine months ended June 26, 2026 included $7.6 million and $17.5 million, respectively, in restructuring and other charges relating to the Separation Transaction (primarily professional services and employee separation costs), as well as $13.8 million and $22.0 million, respectively, in restructuring and other charges relating to the PA Consulting Transaction (primarily professional services, internal personnel dedicated to integration initiatives resulting from the PA Consulting Transaction and employee separation costs).
(3) The three and nine months ended June 26, 2026 included $6.2 million in mark-to-market gains related to investments in equity securities carried at fair value. The nine months ended June 26, 2026 included a $20.5 million loss on the foreign exchange forward contract in connection with the PA Consulting Transaction (see Note 17- Commitments and Contingencies and Derivative Financial Instruments).
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For the Three Months Ended For the Nine Months Ended
June 27, 2025 June 27, 2025
Infrastructure & Advanced Facilities PA Consulting Total Infrastructure & Advanced Facilities PA Consulting Total
Revenues from External Customers (1) $ 2,699,062 $ 332,706 $ 3,031,768 $ 7,928,023 $ 947,116 $ 8,875,139
Direct cost of contracts (2,052,021) (221,337) (2,273,358) (6,052,299) (604,819) (6,657,118)
Selling, general and administrative expenses (411,066) (38,951) (450,017) (1,226,210) (135,795) (1,362,005)
Segment Operating Profit (1) $ 235,975 $ 72,418 $ 308,393 $ 649,514 $ 206,502 $ 856,016
Restructuring, Transaction and Other Charges (2) (34,134) (87,991)
Amortization of Intangible Assets (39,245) (115,946)
Total U.S. GAAP Operating Profit $ 235,014 $ 652,079
Total Other (Expense) Income, net (3) 10,090 (298,006)
Earnings from Continuing Operations Before Taxes $ 245,104 $ 354,073
(1) The nine months ended June 27, 2025 I&AF revenue and operating profit were impacted by a reserve in connection with an unfavorable interim ruling against a consolidated joint venture in which the Company holds a 50% interest (the "Consolidated JV Matter"), with the noncontrolling partner’s share included in noncontrolling interests in the Consolidated Statements of Earnings for the respective period.
(2) The three and nine months ended June 27, 2025 included $22.0 million and $47.1 million, respectively, in restructuring and other charges relating to the Separation Transaction (primarily professional services and employee separation costs), as well as $6.8 million and $20.7 million, respectively, in charges for certain subsidiary level compensation based agreements. The three and nine months ended June 27, 2025 included approximately $4.7 million and $20.9 million, respectively, in charges associated with the Company's TSA with Amentum.
(3) The three and nine months ended June 27, 2025 included gains of $27.4 million and losses of $227.3 million, respectively, mainly related to mark-to-market adjustments and other related charges associated with our former investment in Amentum stock in connection with the Separation Transaction, as well as $9.8 million and $31.5 million, respectively, in income associated with the Company's TSA with Amentum (see Note 14- Discontinued Operations). The nine months ended June 27, 2025 included $20.5 million in discounts and expenses associated with the Equity for-Debt Transaction (see Note 12- Borrowings and Note 14- Discontinued Operations).
In evaluating the Company’s performance by operating segment, the Chief Operating Decision Maker ("CODM") reviews various metrics and statistical data for Infrastructure & Advanced Facilities and PA Consulting. For more information, please refer to Note 18- Segment Information. In addition, the Company attributes each segment's specific incentive compensation plan costs to the segments. The methods for recognizing revenue, incentive fees, project losses and change orders are consistent among the segments.
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Infrastructure & Advanced Facilities
Three Months Ended Nine Months Ended
(in thousands) June 26, 2026 June 27, 2025 June 26, 2026 June 27, 2025
Revenues $ 3,746,900 $ 2,699,062 $ 10,022,055 $ 7,928,023
Operating Profit $ 268,125 $ 235,975 $ 708,089 $ 649,514
Revenues for the I&AF segment for the three and nine months ended June 26, 2026 were $3.7 billion and $10.0 billion, respectively, an increase of $1.0 billion and $2.1 billion, or 39% and 26%, compared to $2.7 billion and $7.9 billion for the corresponding periods last year. The increase in revenues for the three and nine months ended June 26, 2026 was driven primarily from stronger performance in its Global Operations, along with the Americas and International sectors performing strongly across markets and geographies. The increase is also driven by higher revenues associated with pass-through cost in the current year. Revenues for the nine months ended June 26, 2026 in comparison to the corresponding periods for fiscal 2025 reflected lower charges in connection with the Consolidated JV Matter. Additionally, foreign currency translation had approximately $19.5 million and $99.4 million in favorable impacts on revenues for the three and nine months ended June 26, 2026, as compared to $18.9 million and $8.3 million in favorable impact in the corresponding prior year periods.
Operating profit for the I&AF segment for the three and nine months ended June 26, 2026 was $268.1 million and $708.1 million, respectively, an increase of $32.2 million and $58.6 million, or 14% and 9%, from $236.0 million and $649.5 million for the corresponding periods last year. The increase for the three and nine months ended June 26, 2026 was driven primarily by the revenue growth mentioned above, with margin impacts from higher revenues associated with pass-through cost, partially offset by an increase in Selling, general and administrative expenses. Operating profit for the nine months ended June 26, 2026 in comparison to the corresponding periods for fiscal 2025 reflected lower charges in connection with the Consolidated JV Matter. Foreign currency translation had approximately $0.6 million and $8.6 million in favorable impacts on operating profit for three and nine months ended June 26, 2026, as compared to $2.7 million and $2.0 million in favorable impacts in the corresponding prior year periods.
PA Consulting
Three Months Ended Nine Months Ended
(in thousands) June 26, 2026 June 27, 2025 June 26, 2026 June 27, 2025
Revenues $ 329,510 $ 332,706 $ 1,042,517 $ 947,116
Operating Profit $ 73,643 $ 72,418 $ 238,399 $ 206,502
Revenues for the PA Consulting segment for the three and nine months ended June 26, 2026 were $329.5 million and $1,042.5 million, respectively, reflecting a decrease of $(3.2) million and an increase of $95.4 million, or (1)% and 10% from $332.7 million and $947.1 million in the corresponding periods last year. Revenue for the three months ended June 26, 2026 was impacted by delayed client approvals, which adversely affected the timing of revenue recognition. The year over year increase in the nine month period was due primarily to growth in PA Consulting's public services businesses (through the public services and defence and security sectors). Foreign currency translation had approximately $1.5 million and $37.1 million in favorable impacts on revenues for the three and nine months ended June 26, 2026, as compared to $18.2 million in favorable and $26.6 million in favorable impacts in the corresponding prior year periods.
Operating profit for the segment for the three and nine months ended was $73.6 million and $238.4 million, an increase of $1.2 million and $31.9 million, or 2% and 15% from $72.4 million and $206.5 million in the corresponding periods last year. The year-over-year increase was mainly attributable to improved revenues for the nine month period as mentioned above, as well as a decrease in Selling, general and administrative expenses.
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Backlog Information
Backlog represents revenue we expect to realize for work to be completed by our consolidated subsidiaries and our proportionate share of work to be performed by unconsolidated joint ventures. Because of variations in the nature, size, expected duration, funding commitments, and the scope of services required by our contracts, the amount and timing of when backlog will be recognized as revenues includes significant estimates and can vary greatly between individual contracts.
Consistent with industry practice, substantially all of our contracts are subject to cancellation or termination at the option of the client, including our U.S. government work. While management uses all information available to determine backlog, at any given time our backlog is subject to changes in the scope of services to be provided as well as increases or decreases in costs relating to the contracts included therein. Backlog is not necessarily an indicator of future revenues.
Because certain contracts (e.g., contracts relating to large engineering, procurement & construction projects as well as national government programs) can cause large increases to backlog in the fiscal period in which we recognize the award, and because many of our contracts require us to provide services that span over several fiscal quarters (and sometimes over fiscal years), we have presented our backlog on a year-over-year basis, rather than on a sequential, quarter-over-quarter basis.
The following table summarizes our backlog at June 26, 2026 and June 27, 2025 (in millions):
June 26, 2026 June 27, 2025
Infrastructure & Advanced Facilities $ 28,429 $ 22,270
PA Consulting 459 420
Total $ 28,888 $ 22,690
The increase in backlog in I&AF from June 27, 2025 was predominantly driven by growth across Advanced Manufacturing market.
The increase in backlog in PA Consulting from June 27, 2025 was primarily driven by organic year-over-year growth of the business.
Consolidated backlog differs from the Company’s remaining performance obligations as defined by ASC 606 primarily because of contract change orders or new wins not yet processed and our national government contracts where our policy is to generally include in backlog the contract award, whether funded or unfunded excluding certain option periods while our remaining performance obligations represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. Additionally, the Company does not include our proportionate share of backlog related to unconsolidated joint ventures in our remaining performance obligations.
Liquidity and Capital Resources
At June 26, 2026, our principal sources of liquidity consisted of $1.17 billion in cash and cash equivalents and $1.50 billion of available borrowing capacity under our $1.50 billion revolving credit agreement (the "JSI Revolving Credit Facility"). See Note 12- Borrowings for more information. We finance most of our operations and growth through cash generated by our operations.
Cash and cash equivalents at June 26, 2026 were $1.17 billion, representing decrease of $62.5 million from $1.24 billion at September 26, 2025, the reasons for which are described below.
The Company also holds approximately $16.1 million in restricted cash as of June 26, 2026 (reported in Prepaid expenses and other in the Consolidated Balance Sheets), the majority of which relates to the remaining PA Consulting employee benefit trust ("PA Consulting EBT"), a consolidated entity of Jacobs, and was received in connection with the March 20, 2026 PA Consulting Transaction. During the current quarter, approximately $102.0 million of restricted cash was distributed by the trustees of the PA Consulting EBT, to specified PA Consulting employees that were employed by PA Consulting as of March 20, 2026. See Note 15- PA Consulting Redeemable Noncontrolling Interests for additional information.
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The following table presents selected consolidated cash flow information of the Company for the respective periods shown below:
For the Nine Months Ended
(In thousands) June 26, 2026 June 27, 2025
Net cash provided by operating activities $ 352,758 $ 303,619
Cash Flows from Investing Activities:
Additions to property and equipment (61,722) (49,655)
Disposals of property and equipment and other assets 4,506 2,332
Capital contributions to equity investees, net of return of capital distributions 362 932
Net cash used for investing activities (56,854) (46,391)
Cash Flows from Financing Activities:
Proceeds from long-term borrowings 4,057,000 2,173,201
Repayments of long-term borrowings (2,705,828) (926,800)
Repayments of short-term borrowings — (656,981)
Debt issuance costs (16,475) (92)
Proceeds from issuances of common stock 26,177 25,467
Common stock repurchases (614,058) (653,247)
Taxes paid on vested restricted stock (29,211) (26,992)
Cash dividends to shareholders (123,439) (114,813)
Net dividends associated with noncontrolling interests (11,743) (7,440)
Repurchase of redeemable noncontrolling interests and related costs (917,591) (8,472)
Cash Impact from distribution of SpinCo Business — 70,000
Net cash used for financing activities (335,168) (126,169)
Effect of Exchange Rate Changes (8,575) 17,990
Net (decrease) increase in Cash and Cash Equivalents and Restricted Cash (47,839) 149,049
Cash and Cash Equivalents, including Restricted Cash, at the Beginning of the Period 1,236,816 1,146,931
Cash and Cash Equivalents, including Restricted Cash, at the End of the Period $ 1,188,977 $ 1,295,980
Our net cash flow provided by operations of $352.8 million during the nine months ended June 26, 2026 was favorable by $49.1 million in comparison to the cash flow provided by operations of $303.6 million in the corresponding prior year period. This increase was driven by improved working capital performance primarily attributable to a favorable cash timing item at the end of the quarter that will reverse in the fourth quarter of fiscal 2026 and lower cash income tax payments in the current year. These were offset by a one time payment of $240.4 million in relation to the PA Consulting Transaction associated with the settlement of the equity-based incentive grants within other deferred liabilities .
Our net cash used for investing activities during the nine months ended June 26, 2026 was $56.9 million, compared to cash used for investing activities of $46.4 million in the corresponding prior year period due to higher levels of additions to plant, property and equipment in the current year.
Our net cash used for financing activities during the nine months ended June 26, 2026 was $335.2 million. This was driven by $917.6 million in proceeds paid for the repurchase of the remaining redeemable noncontrolling interest shares in connection with the PA Consulting Transaction (including transaction cost payments), common stock repurchases of $614.1 million, $123.4 million in dividends to shareholders, and $29.2 million in taxes paid on vested restricted stock. This was offset by net proceeds of borrowings of $1.4 billion used for the above mentioned uses of cash. Net cash used for financing activities in the corresponding prior year period was $126.2 million, due primarily to common stock repurchases of $653.2 million, $114.8 million in dividends to shareholders, and $27.0 million in taxes paid on vested restricted stock, which was offset by net proceeds from borrowings of $589.4 million, and the receipt of $70.0 million associated with the final settlement of the post-closing working capital adjustments from the distribution of the SpinCo Business.
At June 26, 2026, the Company had approximately $295.2 million in cash and cash equivalents held in the U.S. and $877.7 million held outside of the U.S. (primarily in the U.K., the Eurozone, Australia, India, Canada, and the Middle East region). Other than the tax cost of repatriating funds to the U.S., there are no material impediments to repatriating these funds to the U.S.
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The Company had $247.0 million in letters of credit outstanding at June 26, 2026. Of this amount, $0.3 million was issued under the JSI Revolving Credit Facility and $246.7 million was issued under separate, committed and uncommitted letter-of-credit facilities.
Long-term debt as of June 26, 2026 increased by $1.3 billion compared to September 26, 2025 primarily due to the issuance of the 4.75% Bonds and 5.375% Bonds totaling $1.3 billion. Proceeds from these financing activities were used to fund the PA Consulting Transaction, share buybacks, dividends and taxes paid on vested restricted stock.
On March 13, 2025, Jacobs completed the Equity-for-Debt Transaction (see Note 12- Borrowings for additional information), pursuant to which the Company extinguished $311.5 million under the GBP 2021 Term Loan, in exchange for its approximately 19.5 million shares in Amentum. Additionally, as noted below, on March 27, 2025, the Company and its subsidiary, entered into the 2025 Term Loan Facility (as noted below), the proceeds of which were used to extinguish the remaining $531.6 million under the GBP 2021 Term Loan contract. For more information, please refer to Note 12-Borrowings and Note 14- Discontinued Operations.
On March 27, 2025, the Company, as guarantor, and JEGI, as borrower, entered into a term loan agreement (the “2025 Term Loan Facility”) with Bank of America, N.A., as administrative agent and sole lead arranger, and the lender party thereto. Under the 2025 Term Loan Facility, JEGI borrowed a $200.0 million term loan and £410.0 million term loan for a term of two-years from the date of initial funding, maturing on March 26, 2027. The Company issued Bonds (as discussed below), the proceeds of which were used to extinguish the outstanding balances of the 2025 Term Loan Facilities. Please refer to Note 12- Borrowings for additional information.
In connection with the Post-Closing Additional Merger Consideration relating to the Separation Transaction, the Company received approximately 7.3 million Amentum shares from the 9.7 million shares held in escrow. On April 30, 2025, the Company's Board of Directors determined to distribute the 7.3 million shares of Amentum's stock and declared an in kind dividend payable to Jacobs’ shareholders of record as of May 16, 2025 which was distributed on a pro rata basis on May 30, 2025. Please refer to Note 14- Discontinued Operations for additional details.
On April 10, 2025, the Company collected $70 million in receivables related to final settlement of the post-closing working capital adjustment from the distribution of the SpinCo Business, the proceeds of which were immediately utilized to pay down amounts owed under the Company’s Revolving Credit Facility. Please refer to Note 14- Discontinued Operations for additional details.
On February 6, 2023 the Company refinanced its Revolving Credit Facility, and on February 16, 2023, the Company issued the 5.90% Bonds in the aggregate principal amount of $500.0 million. On August 18, 2023, the Company issued the 6.35% Bonds in the aggregate principal amount of $600.0 million. On March 16, 2026 the Revolving Credit Facility was repaid and a new revolving credit facility (the "JSI Revolving Credit Facility") was established with revised terms including those applicable to the Primary and Designated Borrowers as well as a reduced borrowing capacity. See Note 12- Borrowings for further discussion relating to the terms of the 5.90% Bonds, the 6.35% Bonds, and the Revolving Credit Facility following the issuances and refinancing.
On March 3, 2026, the Company issued the 4.75% Bonds and the 5.375% Bonds (see Note 12- Borrowings for further discussion relating to the terms of the bonds) and the Company immediately used the proceeds from these bonds to repay the then remaining outstanding 2025 Term Loan Facility principal equal to $200.0 million and £410.0 million.
On March 16, 2026 the Company, as borrower, and JEGI, as guarantor, entered into a term loan agreement (the “2026 Term Loan Facility”) with a syndicate of financial institutions as lenders. Under the 2026 Term Loan Facility, Company borrowed a $700.0 million term loan for a term of three-years from the date of initial funding, maturing on March 16, 2029 and $500.0 million term loan for a term of five-years from the date of initial funding, maturing on March 14, 2031. The proceeds from the 2026 Term Loan Facility proceeds were used to fund the PA Consulting Transaction, as discussed below.
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On January 2, 2026, Jacobs entered into the Implementation Deed with PA Consulting. Pursuant to the Implementation Deed and certain related agreements, and in accordance with the terms and conditions thereof, on March 20, 2026, Jacobs completed the transaction to acquire from shareholders of PA Consulting all of the remaining issued share capital of PA Consulting ("PA Shares") owned by the PA Consulting shareholders (excluding shares already held by Jacobs and its affiliates). The Company acquired the PA Shares for an aggregate initial consideration of approximately £1.21 billion which was paid through a combination of approximately £997.6 million in cash (net of certain PA Consulting shareholder expenses) and 2,043,537 newly issued shares of Jacobs' common stock, par value $1.00 per share (“Company Common Stock”). Jacobs funded the cash portion of the upfront consideration through a combination of cash-on-hand and incremental debt proceeds as discussed above. Also, in accordance with the terms of the Implementation Deed, in fiscal 2028, the Company is obligated to pay an additional £75 million in consideration with shares of Company Common Stock, cash or a combination thereof (as determined by the Company in its sole discretion), with accruals associated with this additional consideration reflected in Other deferred liabilities on the Consolidated Balance Sheet as of June 26, 2026. The transactions described in this paragraph, are collectively referred to as the “PA Consulting Transaction”. As a result of the PA Consulting Transaction, the Company no longer carries Redeemable Noncontrolling Interests on the Jacobs Consolidated Financial Statements. See Note 15- PA Consulting Redeemable Noncontrolling Interests for more discussion on the transaction and Note 12- Borrowings for more discussion on the financing for the transaction.
Also, in connection with the PA Consulting Transaction, approximately $113.5 million of initial consideration was paid on March 20, 2026 in cash to the PA Consulting EBT, a consolidated entity of Jacobs, for PA Consulting shares held by the PA Consulting EBT. These cash amounts were reported as restricted cash within Prepaid expenses and other on the Consolidated Balance Sheets as of March 27, 2026. Further, upon the recommendation of the PA Consulting shareholder representatives, in the current quarter, substantially all of the restricted cash was distributed by the trustees of the PA Consulting EBT to specified PA Consulting employees that were employed by PA Consulting as of the March 20, 2026 transaction completion date. The remaining amount of this distribution is expected to take place in the second quarter of fiscal year 2027. See Note 15 - PA Consulting Redeemable Noncontrolling Interests for more discussion.
We believe we have adequate liquidity and capital resources to fund our projected cash requirements for acquisitions including remaining amounts payable associated with the PA Consulting Transaction as well as financing activities such as debt servicing, share buybacks and dividends for the next twelve months based on the liquidity provided by our cash and cash equivalents on hand, our borrowing capacity and our continuing cash generated from operations.
We were in compliance with all of our debt covenants at June 26, 2026.
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Supplemental Obligor Group Financial Information
On February 16, 2023, Jacobs Engineering Group Inc. ("JEGI"), a wholly-owned subsidiary of Jacobs Solutions Inc. (together, the "Obligor Group"), completed an offering of $500.0 million aggregate principal amount of 5.90% Bonds, due 2033 (the "5.90% Bonds") and on August 18, 2023, completed an offering of $600.0 million aggregate principal amount of 6.35% Bonds, due 2028 (the "6.35% Bonds"). The 5.90% Bonds and 6.35% Bonds are fully and unconditionally guaranteed by the Company. The 5.90% Bonds and the 6.35% Bonds and the respective guarantees thereof were offered pursuant to prospectus supplements, dated February 13, 2023 and August 15, 2023, respectively, to the prospectus dated February 6, 2023, that forms a part of the Company and JEGI’s automatic shelf registration statement on Form S-3ASR (File Nos. 333-269605 and 333-269605-01, respectively) previously filed with the SEC.
On March 3, 2026, the Company completed an offering of $800.0 million aggregate principal amount of 4.75% Bonds due 2031 (the "4.75% Bonds") and $500.0 million aggregate principal amount of 5.375% Bonds due 2036 (the "5.375% Bonds"). The 4.75% Bonds and 5.375% Bonds are fully and unconditionally guaranteed by JEGI. The 4.75% Bonds and the 5.375% Bonds, and the guarantees thereof were offered pursuant to a prospectus supplements dated February 24, 2026, to the prospectus dated February 2, 2026, that forms a part of the Company and JEGI’s automatic shelf registration statement on Form S-3ASR (File No. 333-293127 and 333-293127-01, respectively) previously filed with the SEC.
In accordance with SEC Regulation S-X Rule 13-01, set forth below is the summarized financial information for the Obligor Group on a combined basis after elimination of (i) intercompany transactions and balances between Jacobs and JEGI and (ii) equity in the earnings from and investments in all other subsidiaries of the Company that do not guarantee the registered securities of either Jacobs or JEG. This summarized financial information (in thousands) has been prepared and presented pursuant to Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S. GAAP.
Nine Months Ended
(in thousands) June 26, 2026
Summarized Statement of Earnings Data
Revenue $ 3,286,011
Direct Costs $ 2,733,544
Selling, General and Administrative Expenses $ 285,748
Net loss attributable to Guarantor Subsidiaries from continuing operations $ 129,279
Noncontrolling interests $ (1,191)
(in thousands) June 26, 2026 September 26, 2025
Summarized Balance Sheet Data
Current assets, less receivables from Non-Guarantor Subsidiaries $ 1,272,948 $ 938,319
Current receivables from Non-Guarantor Subsidiaries $ 365,144 $ 749,475
Noncurrent assets, less noncurrent receivables from Non-Guarantor Subsidiaries $ 575,267 $ 642,464
Noncurrent receivables from Non-Guarantor Subsidiaries $ 290,796 $ 563,682
Current liabilities $ 1,011,482 $ 1,006,916
Long-term Debt $ 3,579,376 $ 2,236,456
Other Noncurrent liabilities, less amounts payable to Non-Guarantor Subsidiaries $ 362,167 $ 250,106
Noncurrent liabilities to Non-Guarantor Subsidiaries $ 1,145,675 $ 1,110,155
Noncontrolling interests $ 15 $ 5
Accumulated deficit $ (3,594,560) $ (1,709,698)
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