Jacobs sees a largely healthy construction market with especially strong demand tied to vital areas, executives said during the company’s fiscal third-quarter earnings call Tuesday.
Those sectors, in particular, are data centers, infrastructure, semiconductors, energy and power, transportation and water. CEO Bob Pragada said the company’s growing pipeline and record backlog position it for continued growth in fiscal 2027.
“For context, as of Q3, the direct AI build-out represented 11% of our adjusted net revenue up approximately 100 basis points from last quarter, and our pipeline of future opportunities continues to grow meaningfully,” Pragada said.
Dallas-based Jacobs’ data center backlog has roughly doubled while its opportunity pipeline has tripled, Pragada said during the analyst question-and-answer session. Visibility that previously extended six to nine months now reaches two to three years, he said, though Jacobs remains choosy about the jobs it actually takes on.
“We're getting visibility into the pipeline that extends out two to three years,” Pragada said. “We're being selective because there is also a lot of speculative work that's out there.”
Jacobs indicated that capital spending remains uneven but resilient, with private sector and utility customers directing more money toward high-growth construction markets.
Sector performance
Life sciences and advanced manufacturing net revenue climbed 24% year over year, its fastest increase since Jacobs began reporting results by end market in late 2024, CFO Venk Nathamuni said. Data centers and semiconductor facilities drove much of that expansion.
Critical infrastructure net revenue increased 9%, led by transportation and energy and power work. Nathamuni said Jacobs expects that business to grow at a mid- to high-single-digit rate over the medium term.
Water and environmental work was the main soft spot, growing slightly more than 1% as the environmental business continued to face year-over-year headwinds. Still, recent public and private awards should begin generating revenue in the fourth quarter, executives said.
Analysts pressed management on whether the advanced manufacturing acceleration could continue into fiscal 2027. Pragada said the business can sustain double-digit growth because Jacobs serves the broader data center ecosystem, including chip manufacturing and the water and power infrastructure those facilities require.
“It’s a growth engine right now that is deep and broad for us,” Pragada said.
Jacobs expects bookings to remain strong as large program-delivery awards enter the backlog. Asked whether U.S. semiconductor construction activity is accelerating, Pragada said customers are pressing Jacobs to speed up facility designs and that the company’s pipeline continues to grow heading into fiscal 2027.
The short answer, Pragada said, “is absolutely yes.”
By the numbers
Revenue reached $4.08 billion for the quarter ended June 26, up 35% from $3.03 billion in the same period a year earlier.
Backlog rose 27% to a record $28.9 billion. Despite those increases, profits fell. Net income came in at $136.6 million, a 24% drop from $179.6 million a year earlier.
The firm attributed the drop in earnings to completing its acquisition of PA Consulting, a London-based management consulting firm, in January. The transaction resulted in a temporarily higher tax rate, Jacobs said.
