Jacobs Announces Multi-Year Growth Strategy at 2025 Investor Day
Rhea-AI Summary
Jacobs (NYSE: J) unveiled its 'Challenge Accepted' growth strategy at its 2025 Investor Day, targeting 6-8% organic adjusted net revenue growth from FY25-29. The company is aligning its focus on three key markets: Water and Environmental ($220B serviceable addressable market), Life Sciences and Advanced Manufacturing ($120B SAM), and Critical Infrastructure ($390B SAM).
The company set ambitious financial targets including a 16%+ Adjusted EBITDA margin and 10%+ FCF margin by FY29. Jacobs reaffirmed its fiscal 2025 outlook for mid-to-high single-digit adjusted net revenue growth, with adjusted EBITDA margin of 13.8-14.0% and free cash flow conversion exceeding 100% of net income. The company also announced a new $1.5 billion share repurchase authorization and increased quarterly dividend.
Positive
- Strong financial targets: 6-8% organic revenue CAGR through FY29
- Large addressable markets totaling $730B across three segments
- New $1.5B share repurchase authorization
- Increased quarterly dividend
- Free cash flow conversion exceeding 100% of net income
- Robust backlog and healthy pipeline across key markets
Negative
- Significant execution risk in achieving long-term margin expansion targets
- Potential impact from macroeconomic uncertainties including inflation and recession risks
News Market Reaction
On the day this news was published, J gained 1.20%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Aligns company to investment megatrends and high-growth end markets: Water and Environmental, Life Sciences and Advanced Manufacturing, and Critical Infrastructure
Company sets 6
Company sets
Jacobs' leadership team will brief investors on growth prospects across its end markets, resulting in a 6
- Water and Environmental: An estimated
$220 billion - Life Sciences and Advanced Manufacturing: An estimated
$120 billion - Critical Infrastructure: An estimated
$390 billion
Jacobs' Chair and CEO Bob Pragada commented, "Clients choose Jacobs because we have more than 75 years' experience delivering resilient, digitally enabled solutions for some of the world's most complex critical infrastructure and advanced manufacturing challenges. As a simpler, more focused company, Jacobs is robustly positioned to respond to our clients' rapidly evolving needs, as challenges like urbanization, aging infrastructure and environmental resilience intersect. Looking ahead, we expect continued momentum with a strong backlog, a healthy pipeline across key markets and a focus on profitable growth. Our organic growth opportunities pair well with our strong balance sheet. We plan to continue our focus on returning capital to shareholders with our recently increased quarterly dividend and new
Financial Outlook1
Strong positioning, macro tailwinds and focus on growth is driving a robust financial outlook. After a strong first quarter of 2025, the company reiterated its fiscal 2025 outlook for adjusted net revenue to grow mid-to-high single digits over fiscal 2024, adjusted EBITDA margin to range from 13.8
The company also announced the following financial targets for FY25-29:
5-Year CAGRs and Targets through FY29E | |
Adjusted Net Revenue (Organic) | + |
Adjusted EBITDA Margin | +50 to 80 bps/yr |
Adjusted EBITDA | + |
Free Cash Flow | |
Jacobs' CFO Venk Nathamuni added, "Since 2016, we have been on a journey to deliver higher value services and solutions, which has positioned us to thrive. Today, Jacobs is a focused business with a strong balance sheet and robust cash flow outlook that will enable continued shareholder returns."
Investor Day 2025
Jacobs will host its Investor Day live webcast today at 3:00 p.m. EST. To participate, please register at the company's investor relations website at invest.jacobs.com. Presentation materials will be available online at 2:00 p.m. EST.
1Reconciliation of fiscal 2025 outlook and fiscal 2025-2029 targets to the most directly comparable GAAP measures is not available without unreasonable efforts because the Company cannot predict with sufficient certainty all the components required to provide such reconciliation, including with respect to the costs and charges relating to transaction expenses, restructuring and integration to be incurred in fiscal years 2025 through 2029.
At Jacobs, we're challenging today to reinvent tomorrow – delivering outcomes and solutions for the world's most complex challenges. With approximately
Certain statements contained in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding our new corporate strategy, the size and expected growth rates of our core business identified in this press release, expectations as to our future organic growth, the achievement of our financial targets and estimates, our ability to execute on our capital allocation strategies, including share repurchases and dividends, and to achieve the expected benefits and synergies from acquisitions and other strategic investments, and our ability to realize the benefits of the more focused, client-centric business model. We base these forward-looking statements on management's current estimates and expectations, as well as currently available competitive, financial and economic data. Forward-looking statements, however, are inherently uncertain. There are a variety of factors that could cause business results to differ materially from our forward-looking statements including, but not limited to, our ability to fully execute on our new corporate strategy and deliver margin accretive growth, including our ability to (i) benefit from industry trends, (ii) innovate technologies to meet the needs of our customers and benefit from digital transformation, (iii) leverage our global delivery model and scale revenue without proportionally increasing expenses, and (iv) attract and retain a qualified and talented workforce; uncertainties as to the impact of the recently completed separation transaction pursuant to which we spun off and merged our Critical Missions Solutions and Cyber & Intelligence government services businesses with Amentum (together, "new Amentum") on Jacobs' and new Amentum's businesses; the timing of the award of projects and funding and potential changes to the amounts provided for under the Infrastructure Investment and Jobs Act and other legislation and executive orders related to governmental spending, and changes in
For additional information contact:
Investors:
Bert Subin
JacobsIR@jacobs.com
Media:
Louise White
Louise.white@jacobs.com
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SOURCE Jacobs
FAQ
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