Q2 2024 Jacobs Solutions Inc Earnings Call Transcript
Key Points
- Jacobs Solutions Inc reported solid second quarter consolidated revenue with 5% growth and 3% adjusted net revenue growth, all organic.
- The company achieved a significant milestone in the separation of its Critical Mission Solutions and Cyber & Intelligence businesses, receiving all necessary approvals.
- Backlog increased by 2% year-over-year, with gross margin in backlog also increasing by approximately 50 basis points, indicating continued profitable growth.
- People & Places Solutions line of business demonstrated strong performance with record adjusted operating margin of 15.3% and adjusted operating profit growth of 15.3% year-on-year.
- Jacobs Solutions Inc is well-positioned for future growth with a robust pipeline across multiple core market sectors and strategic regulatory advancements in the environmental sector.
- Second quarter GAAP EPS from continuing operations was $1.29 per share, including impacts from amortization and restructuring costs, marking a 7% decrease compared to the previous year.
- Divergent Solutions experienced an 11% year-over-year decrease in adjusted net revenue and a 24% decrease in adjusted operating profit, influenced by a change in government funding strategy.
- A recent program loss in the Critical Mission Solutions segment is expected to put short-term pressure on performance in the second half of the year.
- Q2 free cash flow was negative $71 million as working capital increased, deviating from the exceptional performance in Q1.
- The company's unallocated corporate costs remain elevated, impacting overall profitability, although plans are in place to reduce these post-separation.
Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to Jacobs Engineering's Second Quarter 2024 Earnings Conference Call and Webcast. (Operator Instructions)
I will now turn the conference over to Ayan Banerjee, Senior Vice President, Finance, Treasury, Investor Relations, and Corporate Development. Ayan, you may begin your conference.
Thank you. Good morning. Our earnings announcement was filed this morning, and we have posted a slide presentation on our website, which we will reference during the call.
I would like to refer you to Slide 2 of the presentation material for information about our forward-looking statements, non-GAAP financial measures, and operating metrics.
Turning to the agenda on Slide 3. Speaking on today's call will be Jacobs' CEO, Bob Pragada; and interim CFO, Kevin Berryman. Bob will begin by providing an overview of recent activities, then summarizing highlights from our second quarter results. Kevin will provide a
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