The paragraph outlines the introduction to Jacobs Solutions' Fourth Quarter and Full Year 2024 Earnings Conference Call. The conference is facilitated by Krista, the operator, who introduces Bert Subin, the Senior Vice President of Investor Relations. Bert mentions the prior filing of the earnings announcement and references a slide presentation available on their website. He notes that their 10-K filing is due by November 26 and refers to specific slides for further details. The agenda includes presentations from Jacob's Chair and CEO, Bob Pragada, and CFO, Venk Nathamuni, who will cover company activities, financial performance, and future outlook. The session will conclude with a Q&A segment. Bob Pragada then begins his remarks, expressing enthusiasm for the company's current situation.

In the recent quarter, Jacobs achieved a significant milestone in its strategic shift by completing the separation of its Critical Mission Solutions and Cyber & Intelligence businesses. This resulted in Amentum being listed on the NYSE under the ticker AMTM, and Jacobs receiving $911 million, which was used to repay debt. Jacobs also gained a 7.5% equity stake in Amentum, potentially increasing to 8%, while Jacobs' shareholders received 51% ownership in Amentum shares, possibly rising to 55%. This transaction is pivotal for Jacobs, refocusing the company to capitalize on strong market growth opportunities. The company’s simplified structure and efficient operations are expected to enhance shareholder value. Despite the separation, Jacobs reported a 4% increase in total gross and adjusted net revenue for Q4 across its continuing operations. The company credits its employees for their dedication and contributions to this transformative period.

The paragraph reports on a company's financial performance, highlighting a strong fourth quarter with GAAP EPS of $2.38 and adjusted EPS of $1.37, reflecting a 28% year-on-year increase. The adjusted EBITDA for Q4 grew by 12% to $289 million. For the full year, total gross revenue rose by 6%, with an adjusted net revenue increase of 5%. The GAAP EPS for the year was $4.79, with adjustments leading to an EPS of $5.28, marking a 16% increase from the previous year. The company's backlog increased by 23%, yielding a book-to-bill ratio of 1.67 for Q4, indicating strong future growth prospects.

During the quarter, the company achieved significant wins across various geographies, highlighting its strong market position and expertise. The company is focusing on three key end markets: Water and Environmental, Life Sciences and Advanced Manufacturing, and Critical Infrastructure. The Water and Environmental sector saw impressive growth with double-digit increases in Q4, driven by projects such as the Donald C. Tillman Advanced Water Equalization basins in Los Angeles. The Life Sciences and Advanced Manufacturing sector also experienced strong demand, particularly due to GLP-1 investments, with expectations for continued growth. There is an expansion in the semiconductor sector, exemplified by a new facility project with CG Semi in India.

The facility will produce advanced and traditional packages for sectors like automotive and 5G communications, enhancing strategic positioning in India due to expected growth in electronics manufacturing. Jacobs anticipates strong investment spending in life sciences, semiconductors, and data centers. The company secured a project management role with the UK's Department of Energy Security & Net Zero, collaborating with PA Consulting on energy transition projects. In the Middle East, Jacobs won an award for advisory, design, and engineering services for the King Salman International Airport in Riyadh, aligning with Saudi Vision 2030. The company remains optimistic about future growth and will discuss its strategic vision at its Investor Day in Miami on February 18.

The paragraph discusses the company's strong Q4 financial performance, detailing several key financial metrics. The quarterly results, excluding discontinued operations CMS and C&I, exceeded the adjusted EPS midpoint guidance for fiscal '24. Specifically, Q4 gross revenue and adjusted net revenue both increased by 4% year-over-year, while adjusted EBITDA rose by 12% to $289 million, achieving a margin of 13.6%. Adjusted EPS from continuing operations jumped 28% to $1.37. GAAP EPS saw gains from a mark-to-market adjustment, although this did not affect adjusted EPS, which accounts for a fair value change in PA Consulting's impact. The company provides detailed slides on these financials and reports a significant increase in the consolidated backlog and a 12% growth in gross profit and backlog.

The paragraph discusses the company's financial performance for fiscal '24 and its outlook for fiscal '25. It highlights a Q4 book-to-bill ratio of 1.67, attributing some of this to higher pass-through revenue. Fiscal '24 saw a 6% rise in total gross revenue, a 5% increase in adjusted net revenue, and a 9% growth in adjusted EBITDA, with a 16% jump in adjusted EPS from continuing operations. The company's end markets are split into Infrastructure and Advanced Facilities, and PA Consulting. Water and Environmental markets saw a 13% rise in adjusted net revenue, driven by strong demand across multiple regions. However, the Life Sciences and Advanced Manufacturing market grew only 3%, due to an unfavorable revenue adjustment from an EV battery manufacturer going bankrupt in Europe. Overall, the company ends fiscal '24 with strong growth prospects for fiscal '25.

The paragraph discusses the company's optimistic outlook for fiscal '25, with Life Sciences expected to drive revenue growth due to robust capital investment. The company also anticipates top-line growth in the Semiconductor and AI data center markets, supported by their Water and Energy capabilities. Critical Infrastructure showed a slight net revenue increase, mainly in North America, and is expected to improve globally with rising transportation project demand. Overall, the company expects strong revenue growth in Water and Environmental, Life Sciences, Advanced Manufacturing, and Critical Infrastructure. The segment financials reveal a 12% year-over-year increase in Q4 operating profit for Infrastructure and Advanced Facilities, with a 9% annual increase for fiscal '24. PA Consulting showed modest growth, with Q4 operating profit up 4% and fiscal '24 up 1%, despite slight currency-related declines. The company is encouraged by recent bookings and expects higher growth in fiscal '25.

The company reported strong financial performance in fiscal '24, with $718 million in free cash flow from continuing operations, allowing for $403 million in share repurchases and $143 million in dividends, while reducing net debt to $1.1 billion, resulting in a net leverage ratio of 1.0 times. Looking ahead to fiscal '25, the company anticipates adjusted net revenue growth in the mid to high-single digits, an adjusted EBITDA margin of 13.8% to 14%, and adjusted EPS between $5.80 to $6.20. They aim for more than 100% reported free cash flow conversion, despite anticipated restructuring costs of $75 million to $95 million. The company projects a 14% adjusted EPS growth and 15% EBITDA growth year-over-year. Additionally, the fiscal '25 tax rate is expected to increase to approximately 26% due to the absence of previous year discrete tax benefits.

The paragraph discusses the company's financial outlook for fiscal year 2025, despite anticipating a higher tax rate. It is expected that Q1 revenue, adjusted EBITDA margin, and earnings will be below Q4 of fiscal 2024 due to typical seasonality. However, growth is anticipated throughout the year, with strong performance by Q4. The company is confident in its financial standing and momentum as it enters fiscal 2025, focusing on growth in key markets such as Water and Environmental, Life Sciences and Advanced Manufacturing, and Critical Infrastructure. In the Q&A session, Michael Dudas from Vertical Research inquires about the growth pipeline and how it relates to achieving 2025 financial targets, particularly in the company's major end markets. Bob Pragada notes strong pipeline growth, particularly in the Water and Environmental sector.

The paragraph discusses the growth and outlook for Jacobs in various markets. Advanced Facilities is experiencing double-digit growth, driven by life sciences, while Critical Infrastructure, influenced by transportation, is seeing a resurgence, particularly in Europe, the UK, Australia, New Zealand, and the Middle East. The overall pipeline looks robust, with a higher percentage of next fiscal year's revenue already in backlog. Although there are some concerns about the federal market in the U.S., particularly outside the Department of Defense, Jacobs' work tied to state and local elements and national transportation projects remains strong. Overall, Jacobs' infrastructure outlook is net neutral, with continued strength in Advanced Facilities.

The paragraph discusses the differences in growth rates across various segments within a company, namely Water, Life Sciences, and Critical Infrastructure, with the latter having the largest gap. Steven Fisher from UBS questions the company executives, Bob and Michael, about their strategies to close this gap, the impact of an electric vehicle (EV) project cancellation, and any weather-related effects. Bob Pragada responds by addressing the EV cancellation's impact and outlines growth prospects in Advanced Facilities, Water and Environmental, and Critical Infrastructure. He highlights that pipeline developments and wins outside the U.S., particularly in the UK, Australia, and New Zealand, provide confidence in closing the gap, especially concerning transportation infrastructure.

In the paragraph, Venk Nathamuni discusses corporate cost management and restructuring efforts for fiscal years 2024 and 2025. He highlights significant progress in improving operating and EBITDA margins in 2024, with plans to increase margins further in 2025 by 100 basis points. This improvement is expected through operational efficiencies and cost control measures, some of which will fully materialize in 2025. Regarding restructuring costs, these are expected to decline substantially as transition services commitments to Amentum conclude over the next two to three quarters, with anticipated restructuring costs ranging from $75 million to $95 million. The goal is to complete restructuring in a meaningful way.

The paragraph discusses the discrepancy between a company's 22.5% year-over-year increase in backlog and its revenue guidance, which is projected to rise in the mid to high-single digits. Andrew Wittmann questions this gap, suggesting it might relate to longer projects or specific sectors like Advanced Technology and Life Sciences. Bob Pragada responds by highlighting the significant book-to-bill ratio, with large, multiyear bookings in Life Sciences and Water that aren't negatively affecting margins. The revenue guidance accounts for the multiyear nature of projects and project lifecycle variations, which explains the less dramatic revenue growth despite the backlog increase. Overall, the company feels positive about its performance.

The paragraph features a discussion between Andrew Wittmann, Bob Pragada, and Sabahat Khan during a company earnings call. Andrew Wittmann inquiries about the company's financial outlook for the year 2026, expressing hope for clearer financial results after the current transitional period. Bob Pragada confirms that 2026 should indeed bring cleaner results, although there will be some challenges in the second half of the current period. Sabahat Khan then shifts the conversation to anticipated growth rates, questioning whether the company's projected 5% organic growth rate includes buffers for potential uncertainties, such as changes in administration. Bob Pragada responds that the growth projection is based on client activities.

The paragraph discusses the potential impact of elections on ongoing projects, particularly in relation to state and local jobs in Los Angeles and other global venues, specifically in the sectors of water and transportation, as well as advanced facilities for critical therapies. It mentions that these projects are less likely to be affected by political changes in Washington, D.C. Venk Nathamuni adds that their revenue growth guidance accounts for customer activities, providing a range in the mid to high-single digits. Sabahat Khan then inquires about the company's focus on markets outside the U.S., particularly the UK and the Middle East, noting changes in the Middle East's development priorities and recent UK election spending priorities that align with the company's activities in these markets.

In the paragraph, Bob Pragada discusses the company's presence in the UK and Middle East, emphasizing that they are in these regions to serve local clients. Despite economic fluctuations, the long-term outlook in these areas remains strong. Specifically, the UK is seeing positive developments in transportation and advanced facilities, while water projects have been consistently active. Pragada highlights the importance of leveraging key talent in these regions and other areas like Europe, India, Australia, and New Zealand, which supports the company's global operations. He also mentions that upcoming elections are not expected to impact the strength of their end markets and reaffirms the confidence in their projections.

In this paragraph, Natalia Bach asks Bob Pragada and Venk Nathamuni about the future margins and revenue growth expectations for PA Consulting, particularly for fiscal year 2025. Bob Pragada expresses confidence that the margins will continue to improve, owing to the team's focus on high-value offerings, even amidst events like the UK election. Venk Nathamuni adds that there is optimism about PA Consulting reaching an inflection point for growth in fiscal 2025, supported by a strong pipeline and backlog. This anticipated growth is included in their overall revenue growth guidance for the company, which is projected to be in the mid to high-single digits.

In the paragraph, Venk Nathamuni discusses the company's capital deployment strategy, which prioritizes returning cash to shareholders through buybacks and dividends, and paying down debt. The company plans to use its significant free cash flow to achieve these goals and has already utilized proceeds from a transaction to reduce debt. While organic growth is the top priority, M&A is also seen as a long-term accelerant. Details on M&A will be discussed further on Investor Day. The dialogue also indicates that the company retains a 7.5% to 8% stake it plans to monetize by the first half of 2025.

In the discussion, Bob Pragada addresses the growth outlook for infrastructure markets domestically versus internationally, considering the influence of elections. He notes that growth outside the U.S. has been flattening but is expected to improve, while growth within the U.S. has been positive and is reflected in their growing pipeline and backlog. Sangita Jain asks about the U.S. growth for the upcoming year, which Bob believes will continue to outpace international growth. Sangita also inquires about the flexibility of their talent pool if U.S. public spending slows, to which Bob responds that their workforce is highly deployable worldwide, reflecting a balanced utilization of their people across different regions. The conversation then transitions to a question from Chad Dillard about operating margins in the Infrastructure and Advanced Facilities business.

In the paragraph, Venk Nathamuni discusses the company's strategy for optimizing margins across various business segments, including Water and Life Sciences. He explains that the goal is to balance top-line revenue growth with improved gross and operating margins, aiming for both revenue and margin expansion over time. While there may be fluctuations in margin profiles in different quarters, the focus is on profitable revenue growth that meets corporate averages. Additionally, he highlights that cost-saving measures have been implemented, with their full impact expected in fiscal '25, contributing to the company's margin expansion strategy.

The article paragraph discusses a company's efforts to optimize its market strategy and global connectivity to improve profitability not only through cost management but also by enhancing business efficiency and mix. In a conversation, Bob Pragada suggests that achieving the higher end of their revenue guidance range depends on accelerating current projects in their Water and Life Sciences sectors. Jerry Revich from Goldman Sachs inquires about the potential for margin expansion in the legacy People and Places business. Venk Nathamuni responds, addressing whether the mentioned initiatives can lead to significant margin improvements.

The paragraph discusses the company's positive outlook on margin expansion for fiscal year '25 and hints at more detailed plans to be shared on Investor Day. It highlights the shift in focus towards clients' needs following structural changes within the company, leading to improved sales performance and a significant backlog growth of 22% with a book-to-bill ratio of 1.67. The company notes that this shift from an internal focus to understanding clients' businesses is proving successful.

In the closing remarks of a conference call, Bob Pragada thanks participants for joining and expresses eagerness to provide further updates and engage with investors and analysts in the future. The operator then concludes the call, thanking participants and indicating they may now disconnect.

This summary was generated with AI and may contain some inaccuracies.