Jacobs Solutions 2025 Q2 Earnings Record Low Net Income Decline

Jacobs Solutions reported its fiscal 2025 Q2 earnings on May 06th, 2025. The company's performance in the second quarter fell short of expectations, with earnings per share (EPS) significantly declining compared to the previous year. Despite the revenue growth, Jacobs faced challenges in maintaining profitability, leading to a net loss and a substantial decrease in EPS. The guidance for fiscal 2025 was reaffirmed, with expectations for adjusted net revenue growth in the mid-to-high single digits, in line with previous projections.

Revenue
Jacobs Solutions experienced a 2.2% increase in total revenue, reaching $2.91 billion in the second quarter of fiscal 2025 compared to $2.85 billion in the same quarter of 2024. Within the Infrastructure & Advanced Facilities segment, revenue amounted to $2.60 billion, showcasing robust growth. Meanwhile, PA Consulting contributed $307.66 million to the overall revenue, reflecting a steady performance.

Earnings/Net Income
Jacobs Solutions's EPS declined 95.3% to $0.06 in 2025 Q2 from $1.29 in 2024 Q2. Meanwhile, the company reported a net loss of $-303,000 in 2025 Q2, reflecting a 100.2% deterioration from the net income of $173.53 million achieved in 2024 Q2. The EPS performance indicates a significant downturn for the company.

Post-Earnings Price Action Review
The strategy of buying Jacobs Solutions shares following a quarter with revenue growth has shown modest returns compared to broader market benchmarks. Over the past five years, this strategy resulted in a 13.07% return, significantly trailing the benchmark return of 83.12%. The compound annual growth rate (CAGR) for this approach was 2.52%, while the maximum drawdown reached -10.77%. The Sharpe ratio of 0.29 highlights moderate risk and returns, suggesting that despite revenue growth, the strategy yields limited gains relative to broader market performance.

CEO Commentary
Bob Pragada, Chair and CEO of Jacobs Solutions, expressed strong confidence in the company's performance for the first half of FY25, highlighting robust revenue growth in the Life Sciences, Transportation, and Energy & Power sectors within Infrastructure & Advanced Facilities. He noted a 5% revenue increase in PA Consulting, contributing to a 12% rise in operating profit for that segment. Pragada emphasized positive market conditions and a healthy pipeline of opportunities, affirming the company's commitment to achieving its fiscal 2025 targets.

Guidance
Jacobs Solutions reaffirms its fiscal 2025 outlook, expecting adjusted net revenue growth in the mid-to-high single digits compared to fiscal 2024. The company projects adjusted EBITDA margin to be between 13.8-14.0%, with reported free cash flow conversion anticipated to exceed 100% of net income and adjusted EPS expected in the range of $5.85-$6.20.

Additional News
In recent developments, Jacobs Solutions has announced a strategic expansion of its share repurchase program, authorizing up to $1.5 billion over a three-year period. The company also declared a 10% increase in quarterly cash dividends to $0.32 per share, reflecting strong capital return initiatives. Additionally, Jacobs received $70 million and a right to acquire shares in Amentum Holdings, Inc. as part of the CMS Separation Transaction, further strengthening its financial position and shareholder value proposition.