Jacobs Solutions Inc. (J) delivered what you might call a tale of two earnings reports. The engineering and consulting firm posted strong operational results for fiscal 2025, with revenue growth and expanding margins, but GAAP accounting made the headline numbers look considerably worse than the underlying business performance.
Here's what happened: Fourth-quarter gross revenue came in at $3.2 billion, up 6.6% from the year-ago period, while adjusted net revenue reached $2.2 billion, a 5.8% gain. Pretty solid growth for a professional services company.
But GAAP net earnings for the quarter dropped 55.4% to $138 million, and GAAP EPS fell 55.9% to $1.05. That sounds terrible until you realize the prior-year numbers were inflated by mark-to-market gains tied to Jacobs' former stake in Amentum. Strip out those accounting effects, and adjusted EBITDA actually jumped 12% to $324 million.
The adjusted numbers tell the real story. Adjusted EPS for the quarter hit $1.75, beating the $1.68 estimate. Revenue of $3.155 billion exceeded expectations of $2.261 billion. And perhaps most importantly, backlog reached a record $23.1 billion, representing 5.6% year-over-year growth with a book-to-bill ratio of 1.1x. That last metric means Jacobs is booking more new work than it's completing, which is exactly what you want to see.
For the full fiscal year, gross revenue totaled $12.0 billion, up 4.6% from the prior year. Adjusted net revenue rose 5.3% to $8.7 billion. Again, GAAP net earnings declined 48.9% to $313 million, but adjusted EBITDA grew 13.9% to $1.2 billion. Full-year adjusted EPS increased 15.9% to $6.12.
Chair and CEO Bob Pragada seemed pleased with the results. "We are pleased to have met or exceeded all our key metrics for FY25. We grew revenue organically mid-single-digits year-over-year and expanded our operating margin meaningfully," he said.
Pragada pointed to strong growth across several sectors in the Infrastructure & Advanced Facilities segment and noted improving momentum at PA Consulting, which Jacobs acquired to expand its digital and consulting capabilities. "We enter FY26 with multiple secular tailwinds, clear line-of-sight to continued synergistic expansion with PA Consulting and a record backlog, positioning us for profitable growth," he added.
CFO Venk Nathamuni highlighted the company's capital allocation strategy. "We delivered a record $1.1 billion of capital back to shareholders during FY25 through share repurchases and dividends, and we plan to continue returning capital to shareholders given the strength of our balance sheet and our outlook for cash generation," he stated.
Looking at segment performance, Infrastructure & Advanced Facilities generated $10.8 billion in revenue and $903.5 million in operating profit for fiscal 2025. PA Consulting brought in $1.3 billion in revenue and $278.5 million in operating profit.
The company generated $686.7 million in operating cash flow and $607.5 million in free cash flow during the year. Jacobs ended fiscal 2025 with $1.24 billion in cash and cash equivalents against $2.24 billion in long-term debt.
