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Wins in two fast-expanding construction sectors fueled growth at the close of Jacobs’ fiscal year, according to the the company’s fourth quarter results report.
Demand for water and environmental services increased in the fourth quarter, Jacobs CEO Bob Pragada said during a conference call with investment analysts to discuss the results. This drove double-digit growth across Jacobs’ portfolio in areas such as water transportation, waste water treatment and potable reuse.
“We have been successful in meeting demand in these categories,” Pragada said. “In particular, during the fourth quarter, we achieved several key wins, including our designation by Los Angeles Sanitation and Environment to provide progressive design and construction services for the Donald C. Advanced Water Equalization Basin. Tillman, a key part of Los Angeles’ long-term plans. increase the production of recycled water by 2035″.
Jacobs also reported growth across geographies, with double-digit gains not only in North America, but also in the UK, Australia and New Zealand. This shows the overall demand for water infrastructure improvements, Pragada said.
In the United States, much of Jacobs’ project portfolio consists of state and local projects, Pragada said. He emphasized the stability of these markets, even as the future of federal spending remains uncertain under an incoming administration.
Bob Pragada
Courtesy of Jacobs
“The transportation jobs we’re in nationally have long lines,” Pragada said. “We still see the pipeline very strongly.”
While federal spending makes up about 10 percent of Jacobs’ portfolio, most of it is tied to Defense Department infrastructure, which Pragada also highlighted as an area of continued strength.
Life sciences and advanced manufacturing construction also contributed to Jacobs’ momentum, according to the company.
“We see the pipeline continuing,” Pragada said. “Advanced facilities continued strongly. This industrial relocation, onshoring, specifically in the US, we feel confident about.”
Pragada said life sciences customers are accelerating investments in pharmaceutical and biopharma facilities, which should serve as another critical growth driver. That, along with semiconductor construction and the need for data centers to run artificial intelligence applications, should drive “top-line growth,” said Venk Nathamuni, Jacobs’ chief financial officer.
“Our outlook is for life sciences to be the main driver of revenue growth in fiscal 2025 as capital investment from our life sciences clients remains robust,” Nathamuni said on the call . “We’re also seeing our customer base expand in semis and the AI data center opportunity is expanding as we look to fiscal 2025 and beyond.”
Contributions of earnings
Jacobs reported earnings of $325.44 million for its fiscal 2024 fourth quarter, which ended Sept. 27, a 118 percent gain from $149.38 million in profit a year ago. Its revenue for the quarter reached $3 billion, up 4.4% from $2.83 billion in the fourth quarter of 2023, according to the company’s earnings report.
The Dallas-based company’s backlog rose sharply to $21.85 billion, up 22.5% from $17.84 billion a year ago.
Analysts praised the company’s results, largely due to profitability and backlog.
“2024 was a solid year for Jacobs, with some strong wins in high-growth end markets in areas such as water, environment and advanced facilities,” wrote equity analyst Faisal Hersi of Edward Jones Financial Services. in a research note. “We believe Jacobs remains well positioned to benefit from continued increases in infrastructure spending in the United States and abroad.”
Domestic construction activity should also continue to outperform international markets next year, Pragada said.
“Our growth in the US remains strong,” Pragada said. “We expect that to outpace international demand as we continue to build on double-digit increases in the portfolio.”
