[Management View]
Jacobs Solutions reported a record backlog and double-digit adjusted earnings growth in Q3 fiscal 2025, driven by broad end-market strength and disciplined cost management. The company raised its full-year fiscal 2025 adjusted EPS guidance for the second time, citing favorable project mix and ongoing margin gains. Strategic partnerships, notably with NVIDIA in AI data centers, are expanding, with a rapidly growing pipeline in this area.

[Outlook]
The company projects adjusted net revenue growth of approximately 5.5% for fiscal 2025, with an adjusted EBITDA margin of about 13.9% and adjusted EPS in the $6.00–$6.10 range. For fiscal 2026, revenue growth is expected to outpace fiscal 2025, with further margin improvement as gross margin initiatives take effect.

[Financial Performance]
Adjusted EPS rose 25% year-over-year to $1.62 in Q3 fiscal 2025. Adjusted net revenue increased 7%, and adjusted EBITDA grew by more than 13% to $314 million. The backlog reached nearly $23 billion, up 14% year-over-year.

[Q&A Highlights]
Question 1: Can you expand on the data center submarket growth? Are you seeing bigger scope being assigned to Jacobs?
Answer: The data center submarket is experiencing substantial growth, with increased inquiries and engagements. The scope has expanded beyond design to include power and water requirements. The partnership with NVIDIA is transformational, serving as a reference design for NVIDIA's customer base.

Question 2: Can you talk about the makeup of the backlog and the pace of burn you expect on it?
Answer: The backlog is growing in advanced facilities and water sectors, which have longer burn profiles. Life sciences and advanced manufacturing have faster burn rates, with strong growth expected in Q4 and fiscal 2026.

Question 3: How does the new federal policy impact your business, particularly in defense and infrastructure?
Answer: The policy provides stability in state and local governments, with significant opportunities in DOD infrastructure and FAA projects.

Question 4: What are the onetime costs associated with the separation, and how do they impact fiscal 2026?
Answer: Onetime restructuring costs are on track to be $75–$95 million, with a significant reduction expected in fiscal 2026.

Question 5: What is the confidence level in FY '26 growth being ahead of FY '25?
Answer: Confidence is high due to strong momentum in life sciences, data centers, and water sectors.

Question 6: How are critical infrastructure trends in Europe and the Middle East shaping up for fiscal 2026?
Answer: Europe is rebounding strongly, and the Middle East is experiencing double-digit growth in cities and places.

Question 7: How is PA Consulting performing, and does the backlog support continued growth?
Answer: PA Consulting is seeing robust revenue growth, supported by a strong backlog and pipeline.

[Sentiment Analysis]
The tone of the management was optimistic, highlighting strong performance and strategic growth opportunities. Analysts were focused on understanding the implications of strategic partnerships and backlog composition.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|-------------------------|---------|---------|------------|
| Adjusted EPS | $1.62 | $1.30 | +25% |
| Adjusted Net Revenue | +7% | - | +7% |
| Adjusted EBITDA | $314M | - | +13% |
| Backlog | $23B | - | +14% |

[Risks and Concerns]
Potential risks include economic uncertainties and the impact of federal policy changes on state and local government spending. The company is also navigating restructuring costs related to recent separations.

[Final Takeaway]
Jacobs Solutions delivered strong Q3 results, driven by strategic partnerships and a record backlog. The company is well-positioned for continued growth in fiscal 2026, with a focus on expanding its presence in high-growth markets such as AI data centers and water infrastructure. Management's confidence in future performance is supported by a robust pipeline and favorable market conditions.