Q3 2024 Jacobs Solutions Inc Earnings Call Transcript
Key Points
- Strong backlog growth with a 6% year-over-year increase, indicating robust future business.
- Consolidated adjusted EBITDA increased by approximately 11% year-over-year, showcasing improved profitability.
- Significant progress on the planned spinoff of Critical Mission Solutions and Cyber Intelligence businesses, expected to complete in the second half of September 2024.
- Strong performance in the People & Places Solutions (P&PS) line of business, with a 12% year-over-year increase in adjusted operating profit.
- Robust free cash flow generation, with $445 million in Q3 and an expectation of exceeding 100% free cash flow conversion for fiscal year 2024.
- Critical Mission Solutions (CMS) revenue decreased by 3% year-over-year, indicating challenges in this segment.
- Divergent Solutions saw an 11% year-over-year dip in adjusted net revenue and a 40% decrease in adjusted operating profit due to government rate adjustments and program delays.
- Total restructuring costs are expected to be approximately $300 million for the fiscal year, driven by higher separation transaction costs.
- Guidance for fiscal 2024 adjusted EBITDA is near the lower end of the $1.54 billion to $1.585 billion range, reflecting some operational challenges.
- Uncertainty around the timing of the IRS ruling for the tax-free status of the spinoff, which is critical for the planned separation transaction.
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 the Jacobs Solution third quarter 2024 earnings conference call and webcast. (Operator Instructions)
Thank you. I will now turn the conference over to Ayan Banerjee, Senior Vice President of Investor Relations and Finance. 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 refer 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; Special Advisor to the CEO, Kevin Berryman, as well as our new CFO, Venk Nathamuni. Bob will begin by providing an overview of
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