Jacobs Engineering (J) 21 Nov 222022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Jacobs Fiscal Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions] Thank you. It is now my pleasure to turn today's call over to Mr. Relations. Investor Doros, Jonathan ahead. go please Sir,

Thank you. all. morning to Good

the Our and and financial of we and to XX-K Slide reference the refer the measures. like this information morning were filed about during we'll have which materials presentation X our earnings I you non-GAAP on would to announcement slide website call. presentation posted for of a copy statements forward-looking

X. turning Now on to agenda Slide the

Officer, Demetriou; in-depth call will today's Chair and be Pragada; President as Financial and cash Chief performance will Operating platforms. business our flows. will begin our fourth Steve of review discussion of Steve on will Speaking then financial more of quarter and then and Officer, Kevin Chief results technology metrics Jacobs' as of by overview Bob reviewing Berryman. and President our and CEO, Kevin a balance our well line an provide review our sheet and software a Bob provide by

details now outlook the appendix will open provide for to With our In questions. Bob leading and examples along your including Demetriou, up this CEO. over I'll the ESG our presentation, we'll and information, remarks closing provide that, additional of we then Finally, pass of some it call with on ESG-related Steve solutions. updated Chair

and you outlook. to us and discuss performance today XXXX for business XXXX joining fiscal Thank our fourth year quarter

expansion core From result execution this nature we financial of next across solutions, and transformed significant unlock to a capture and transition long-term strategy data to response, in high-performance while we've phase the will I Jacobs' moving the believe and benefiting our profit As the our opportunities diversity identified profile. of enhanced to strategy about forward. excited Executive growth margin growth culture I'm our strategy consulting recurring confident our businesses. boldly Chair, elevate revenue advisory rigorous and continues in climate of This standpoint, from and

revenue continuing our as shareholder total value reinventing to and the a our we the maintain doing of XXXX, transformative S&P through investments, return to we transformed our reshape able X a including profit of brand, leading organic started to grew And focus all promise almost our we last on acquisitions journey margins, deliver today approximately strategies, our and culture and expanded for as return will XXX. phase the our intentionally Since of challenging believe During we twice our equally be were together in maintained and XXX%, by our brand we shareholders. stakeholders, divestitures. of next business so, tomorrow. We

quarter of in fourth our recent strong demand discuss in now Let's with results. marquee a pipelines sales number our underscores strategy. opportunities which We're wins seeing our robust

revenue quarter currency X% currency across business. prior quarter year-over-year line currency During also and posted year's fourth basis. a growth. X% constant the constant was units & the in in of quarter. Backlog grew quarter, each and of experienced Places with again People XX% a on operating net basis year-over-year X% another constant and grew And remaining up growth the currency constant on growth profit our facilities year-over-year double-digit business top advanced the Solutions, line P&PS Within from

U.S. to year-over-year. translation up year PA major to a successfully continued double-digit battlefield. clearing previously a guidance Critical constant PA when to strong dollar in even with operating close see protest within Consulting and X% win last be contract Consultancy QX with is the the the constant our net From stages During growth large of to another in finished Ministry soldier -- what's full Solutions we cyber a enabled original with on strengthening a next-generation currency into with revenue profit basis. recognizing the Defense multiyear current delayed opportunities the currency backlog year the range, and secure growth and final revenue won Mission with standpoint, proving the beginning up week digitally PA a X% and the impact quarter, period. to show win from

X. to Turning Slide

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call the our I'd day, over years. single living progressing and Before the last several the providing for is solutions to Every values Jacobs thank critical at our I amazing to people culture like Jacobs globally. Bob, first, turn over

launch sovereign that autonomous remediating the truly example, a transportation make green on for biotechnology delivering from supporting to For solutions our city chemicals no for our of water planning It company people or Artemis other. the future. harmful Jacobs world-scale or like recently, manufacturing for is move the most hydrogen NASA nations, consulting solutions, PaaS the

who to Now, proven experienced a boldly congratulate our lead have record Bob to dynamic strategy to of CEO track a to I'm like moving Bob? that future. domain and his into brings and leader excited forward industry I'd decades knowledge appointment the on say

on his our take increasing and our role discussing I'm Jacobs. Thank business converting successful in incredible to which early X, of over diversify shareholders With at partnership a leader will top honored past global on line opportunity next underpinned value I'll is on thank our want CEO and Steve past strong Places clients results People tremendous the up our guidance all is advance rise priorities inspires and Slide Solutions and and legacy years. underway and expanded leave accessible you, further an backlog I this He around the for workforce bottom begin X the infrastructure the in backlog. work success critical over & alike. offerings, to who currency. This to by X% that we've Steve. achieved year-over-year XX% year our exciting our for capabilities where with constant year, XX% quarter into been and and show results our we the people, year. opportunities

themes, that Jacobs climate under quarter multi-geography data-enabled expertise delivery grew highlight our see proof strategy replacing solutions. XX% 'XX, modernization can profit Across chain FY basis domain example, results solutions teams. by outcomes, on -- our as with how I'll operating I'll well deep It's a in facilities response. results For infrastructure delivery our of and facilities currency Overall, advanced themes technology transform due action. and data advanced conventional supply over client these we unit Jacobs scalable discuss in constant operating and success. our modern our infrastructure the enable diversification, to

and investment that In has clients life are continue through advanced with scale. health care led of delivery as vaccines as and a on well our in long-term generational chain the supply sciences, profiles a conditions. changing expanded First, of [indiscernible] diversification expansion global middle clients for to economic therapeutics

most leveraging to digital chronic diseases multiple confidential clients medicines expertise accelerate across large-scale the production biotech life-saving Jacobs' capacity Our widespread can by in campuses. for delivery optimize design for

point-of-care entire in resulting to for EV New Children's develop of Jacobs U.S. analytics remains the and capacity from address the Philadelphia predictive to growing list positioned infrastructure ecosystem in capacity. uniquely charging of Control vehicle advising Disease manufacturing production Centers Jacobs' sustainable such electric aspects outcomes the Infrastructure support across all advanced and delivering clients to Wales with population implementation. Australia, improved We as manufacturing leading expanding are market of in Hospital With EV aging a automobile for for mobility clients also rapidly and South to Health this and expanding are seeking treatment and tailwinds favorable

a including geographies, of increase to across in is the building green Moving In U.S. energy new import through affordable Grid, bookings Korea pipeline green with developing production momentum National of projects led delivery. are into the response. in Energy an moving sales Energy, of cycle climate XX% wins and multiple demand and hydrogen Global where to U.K.'s [indiscernible] supported U.S., the over we're IIJA Department for facility.

states no broad DOTs. Electric across the under or is there multiple multiple low emission program, example, for focus navy decarbonization transportation Vehicle in the a Infrastructure on For brand support National with programs. and vehicle the for Charging NEVI, infrastructure

climate-driven sector flooding investing the and integrated of to water due technologies, leveraging in human damage marketing For proof technologies AI clients AquaDNA, Dragonfly extensive to for living wins the access we clients avoid predictive public the clean At in Water agency as U.K., both cloud-based are to digital sector in spatial, Rico, environment Florida, in our prioritize all Louisiana, investments. clients analytics a enable for concept, casualties other reliable landscape, national communities, disasters. with thanks time, traditional opportunities transportation partnered this to our are services platform, us intelligent to Puerto same chose expanded to we've Consulting. and operations data to These leading maintenance. new sector cyber insights streamline clients and StreetLight transportation new ML from provide Toronto, capabilities, and evidenced continuing partner PA their performance with estate complex all With with expanded such real the quarter transformative Data's harbor advanced multimodal digital and summary, private Hawaii, to infrastructure multiyear highways Clients to regional continue Australia. Jacobs recently and & sustainable and places. People a security In geographies to hiccup. address energy manufacturing Scandinavia, expansion client look are In in liveable Copenhagen, the Denmark. tunnel across the to infrastructure, long-term more transit projects awarded strong and ways development deliver for Pearl management. positioned is deliver growth Aven Solutions their Nord mega $XX plan XX-year modernization, new driving to trends Under are Harbor Singapore innovative sustainable, program installation efficient as for delivery These are designing joint U.K., across delivering adaptation we for base outcomes. clients the support in Places extension are climate for billion a Jacobs asset segments. MetroLinx platforms by standard expansion. lasting And to In the as we and

Critical solid up XX% and to Solutions at profit currency. Moving business. Mission of was $XX.X in the in in review with strong performance fourth backlog line CMS year-over-year, to backlog remaining delivered quarter Slide flat constant with gross billion, year-over-year XX% X

launch provider, diligent help launch space, back is strong and all U.K. service in delivered White and solutions Our awarded Jacob's a uncrewed aligned demand program, hypersonics Also, offering focused the launch last moon to X on being historic models continue the and House including them growth other and spend CMS customer site space with Zero the service contractor Jacobs NASA's we role cybersecurity were sat contracts Architecture cyber, intelligence, launch reactors. solutions are by across them. Scottish the astronauts strategy to XXXX. of of In expansion Artemis rocket Several the preparation small Jacobs rocket operate core build The proud key we seeing mandates, vertical in national And the and solutions Artemis growth Trust to launch that critical markets Beginning creating federal to Architecture Trust across offerings continued energy. margin our are in the see we satellites by our to and of mission. for government. technology-enabled by is week integrator manufacturer the Executive U.S. CMS's to of ZTA [ph], Order, or trends include adoption to revenue of a prime critical XXXX, across markets: key successful Zero modular system contributing is our in ZTA. for space, defense and we are Urbex, priorities.

for positions Trust and operating leadership of continuous one program component Jacobs' executive of the of identity Importantly, unit help ZTA ICAM our Zero in users [indiscernible], a team requires as models Jacobs' credential is House federal the manager responsible is move network Divergent communities architectural the to now ICAM. movers critical Solution laterally this effective cyber for largest as verification area new systems. part the intelligence of meet which through government, identity, access and management, White across technical is clients us order. intelligence

a Laboratory. and has new agile or cyber adoption. In ZTA one sustainment capability cyber and also the intelligence their unit advance to won significant including pipeline Navy intelligence opportunities business an Our sensing non-ZTA contract development contracts, the a assisting QX, and of at several team Naval Research classified our requiring contract radar software

cleared for DoD $XXX the not which is support to a IDIQ, reflected million recently protest providing period also identity backlog. We the in yet X-year intelligence

hypersonic solutions. speeds developing Defense and advances and are With weapons fly against. against can defenses in per missile positioned and launch the to itself The California. Naval platform modernization, in to MAC in and and X supporting operate IDIQ also Air million technology contract emergent they was leader hypersonic at Warfare Station, a with X-year [ph]. the defend more defend other support experience and hypersonic at in-air Because threats. is awarded in quarter, NASA least route system for has launch on Jacobs of design, second underwater Lake the Moving by of decades Surface weapons of Naval to an fabrication target, the China Weapons operation an at Russia, and Department difficult last the testing Jacobs China covers mile to $XXX a U.S. help design has In Force to roughly as U.S. Navy missile maneuver test U.S. Air their hypersonic X, hypersonics.

Nuclear power energy coming as modular Finally, to fossil fuels. a is clean favor demand reactors. into for alternative

carbon Small and are goals For versus capacity factory security, generation. next designed efficiency. engineering as and advice gigawatt and benefits, Nuclear modular manufacturing energy through include XXX In countries ensure SMR on delivering reactors the generating isolated smaller and or numerous megawatts grid leaders traditional the greater large emission-free U.K., areas services emission SMRs generating or their they electric modular that energy technical are reactors also and investment, capital flexibility high to with to need AMRs, licensing to to have Rolls-Royce program initial greater in achieve look producing zero reactors new benefits always-on enter scalability lower of capacity green realizing increased to such SMRs more. the of independence There's specific provide processes, X including U.K. siding they with heat Energy the and for as we to Hitachi are interest or market. hydrogen. greater advanced reactors can GE be

capabilities enterprise than Nuclear. level contracts long X years leader in of for visibility a large of funding. XX% supporting CMS's organic multiple see federal are building and of Jacobs consisting and our vendors approximately legacy durations government solid of solutions in U.S. AMR nuclear with summary, global from revenue 'XX is and to we the FY We on our XX% continue U.K. and portfolio, and solutions, Wood with in acquisitions CHXM In greater

to Government We And recent the remains proposals Force are new billion our for next Office's expanding Contract, $XX source at an re-evaluate of The new selection its sales ISC Accountability also pleased in $XX source large multibillion-dollar X.X, business billion, approximately including opportunity. margin have XX-month Integrated this in decision. CMS with a pipeline profile. pipeline remains U.S. selection the with robust the a support as potential Support qualified in therefore, with guidance Air

to ability work. assist insight to exciting Slide lasting consistent is enduring cycles and clients demand economic its to for PA generating PA's and its also is and on Consulting continues expertise. PA deliver relationships through on securing deep Moving X. strategy

PA was This quarter, wins awarded markets. key marquee across the

continues explosive player, delivery reform As PA contract posed care government radio-controlled multiyear U.K., Team social opportunities. Steve the compelling be PA The was a appointed public the additional experience Schipol once-in-a-generation devices, delivery opportunities of positioned Transport substantial continue with areas improvised strongly providing as U.K. where broad-based selected footprint sector. is digital where partnership and position integrator in on extensive focus they won PA boardroom program the the and counter a to the airside joint market Airport for capabilities in the by major a creates in as for and consulting, of delivery to major solutions sector, to cementing Jacobs at consortium, global capitalize major further a threats its domain PA's oversee distinct value IED. public Netherlands, lead and operations. Jacobs of mentioned, lead PA together awards The further continue a systems was expertise opportunity. next-generation PA's with create proposition contract Protect. in Jacobs' it's leverages in program in the also high-end to include of digitalization to advisory to to

Now, I'll to over turn detail. Kevin review call our financial results further the in to

months. third primarily ramped business driven of remediation CMS wins large incremental U.K. the revenue such quarter over of points award will fourth X margin grew two, MOD overview Thank over quarter in and by: but the newly as fourth was XX% constant on quarter net of was and versus gross X% in And up investments revenue a in basis year grew and as in that quarter XX% contract; turning slightly down advance lines businesses to ago a results. to employees X% line net revenue percentage TA the X% you, for our quarter improved currency. one, XXX a Adjusted constant financial of was the of due and Slide year-over-year the from approximately the coming revenue in basis. Fourth year-over-year, currency ramp our gross a Bob. All year-over-year

improve strong points by cyber, revenue QX during driven margins PA & and from down year-over-year. net a XXXX, G&A Adjusted and wins basis as QX gross fiscal basis was in continued recent mix, Solutions Places from business. recent expect to points performance our XX XXX wins in People modestly favorable revenue XX.X%, levels We down Consulting of percentage in

During we the structure. labor quarter, benefited as our lower expenses cost from managed we

deal-related fiscal half G&A restructuring $XXX efforts was by a GAAP the of profit for third-party a recoveries stay from And costs and from million targeting below associated are was XX% excluded $XX of up costs up million revenue from currency of integration which results. XXXX. percentage finally, $XX million intangibles full a positive was mainly therefore over amortization adjusted constant and other impacted of with operating net million, acquisition operating $XXX year-over-year. On benefit our million and acquisitions. We basis, year-over-year. as to XX% was with profit pretax $XX of we acquired Adjusted year it XX%

operating benefit intangibles of was receivable, XX.X%, amortization tax to third-party charge later impact rate, a revenue and benefit basis points discuss was XX of offset from adjusted our other and I'll costs. line to the related business reviewing $X.XX from the acquired align share effective $X.XX per GAAP the to $X.XX parts profit adjusted a Our up recovery transaction, when net performance. to by related $X.XX restructuring the $X.XX included and operations continuing EPS from moving year-over-year. a

up was up up adjusted XX.X% XX% On year-over-year and basis, was EPS consolidated Jacobs' up adjusted items, QX these a adjusted constant XX% of currency. year-over-year. and year-over-year, constant EBITDA net revenue. representing third $XXX XX% quarter million was in was EBITDA Excluding XX% $X.XX, currency

of year-end the backlog was dollar third the currency and at the impacted was strengthening U.S. year-over-year backlog X% basis. up X% constant end by on Sequentially, to quarter. compared Finally, a

pound to versus QX As from dollar QX. X% of the strengthened an the the end of example, the end sterling

constant currency higher and year-over-year book-to-bill As was backlog backlog book-to-bill basis, a basis. within both revenue ratio X.XXx gross a given The sequentially. result, a at margin profile with was X.XXx our flat on margin on sequential a

the time awarded. Our rebid book-to-bill continues until the approaching be to is the of to as ratios NASA which rebid continue impacted burn by backlog fall Kennedy

in basis. mid-single GAAP and currency in performance. for material single expect currency. constant $XXX revenue year net Slide grew and Now On high the XXXX as basis. constant reported growth up was decrease onetime constant year digits Adjusted revenue in on Adjusted EPS was XX to currency expanded constant currency constant year-over-year GAAP grew fiscal XXXX profit related was XX% and on XX our was and [ph] Fiscal items a of points to Operating and support up was XX% revenue up growth X% a EPS grew currency. XX% revenue in to solid driven lower mix costs. on year-over-year, the underlying restructuring year-over-year $X.XX, brief XX% by a transaction and we currency and moving $X.XX digits adjusted operating up driven up a a as a benefits basis, EBITDA profit XX.X%, basis business. recap profit significantly XX.X% $X.XX million, gross full well in by billion, XX% operating basis. nearly XX% margins up constant and

As EBITDA XX of XX.X%, was points adjusted XXXX. basis net a from up percentage fiscal revenue,

a We lower modest driven XXXX, by of costs. higher revenue margin in combination profit and fiscal mix margin operating adjusted employee-related expansion a expect

adjusted expected basis, be trailing book-to-bill the year-over-year higher and X.XX. costs X other burdened are income will rate margins over However, EBITDA was margin by at unfavorable gross be book-to-bill flat a interest environment. by X.XXx XX-month primarily was On driven as pension to

Links did and $XX on of year revenue fiscal a basis year remediation $XX our QX the to currency, first performance. part the year-over-year the full of Fiscal up Starting the contributed with benefit up the from currency XX as million revenue XX part and ramp and CMS; revenue. for was Regarding the win. as performance fourth XX% the LOB [indiscernible] turn performance, in Slide contributed revenue -- Idaho Black of XXXX. X% for Slide in for approximately year let's quarter not million year QX constant constant nuclear to XXXX reported XX% grew

previous double-digit the currency result, growth XX% a down down as operating basis. $XX fiscal growth expect in Operating business profit constant XX% operating in margin continuing were mid-single resolution. our the unit. we year-over-year X.X%. profit during points the were a a For year basis our margins course million, was our higher G&A The QX and business. ramp and slower CMS over percentage of Solutions down year-over-year rate business rate the XXX intelligence and the cyber related in true-up year given on true-up to revenue with in digits for was by XXXX, Consistent outlook, higher the QX to the Divergent CMS impacted

forward, new continuing Looking have delayed was cyber during resolution, successfully win large we a been awarded classified developing momentum. previously indicating the that

into of and Looking QX. fiscal rebound from we driven immediate win awards. also XXXX, margin sequential by XXXX margin ramp onetime we through true-up targeting expansion expect new approximately operating the points higher-margin fiscal XX rate basis We're as QX and in in expansion further

Places grew X% reported to Moving on currency. constant XX% was P&PS each And up revenue currency. the year-over-year On results. delivered QX People basis, demonstrated revenue operating profit in and a and year, constant growth. and a basis revenue X% & for P&PS strong constant currency Overall, full net up region Solutions. X% in P&PS net

business our investments another stellar advanced our of into life growth. semiconductor EV in sciences, double-digit posted operating benefits chains, from supply deeper facilities revenue quarter and Looking units, the profit unit which

For north XX%. of grew the the well profit year, operating business fiscal

but grew double International growth comparisons. constant strong to XX% and continue XXXX robust expect at digits year-over-year to reported in basis operating QX flat rate on a despite P&PS The our essentially was fiscal We currency. remain revenue the profit during year facilities advanced the business, year-over-year approximately

profit XX% full currency. the constant up year, year-over-year in operating For was international

basis on in margins be poised XX% impacted operating to XXXX, gross QX profit but net by continue revenue growth operating and People year will as and basis. percentage basis operating currency, a up XXX ago. on up business Places constant growth during Total year-over-year XX growth & well a labor was as is materially reported international the with up up revenue quarter. revenue QX as flattish year versus profit X.X% a up points, P&PS costs with profit Full driven a reported year profit during in basis Our were by and for XX.X%, full margins resulting constant lower operating of up of FX fiscal points currency XX% and mix

revenue X% continued of utilization quarter year-over-year due U.S. QX and was margin profit in in grew pound PA's declined lower PA in terms In the XX.X% sterling. but investments X.X% performance, it QX to adjusted dollars pipeline during pursuits. operating

to mentioned, Consulting been has winning MOD with benefit PA later expect which the award in show successful XXXX. Bob the for we [indiscernible] As large

double-digit margins to continue returning target above constant operating XX% a currency growth throughout improved by with on revenue We basis to driven utilization. XXXX,

and higher expect corporate non-allocated year-over-year benefits. as our extent, million, we a costs to supported impact were currency from and costs positive lower now on $XX from incentive Our non-allocated million lesser is a costs down expect costs $XXX as to on -- benefited corporate other We costs fiscal year-over-year incentive XXXX which million fiscal to XXXX for we than year be a $XXX higher slightly basis. costs

balance flow was $XXX to be other sheet. items. transaction generation cash to Slide related full Now basis, million XX our discuss On QX and in included announced and a continued million to $XXX repayment flow Cash to Inpex $X strong. cash net turning Free flow payroll was costs million outflows and to settlement, million $XX $XX benefit tax of a other first $XXX deferral previously million flow cash included reported million the related cash Act of and cash related the to net Cares items. but year the

the items, year. income free to conversion these for was flow Excluding XX% adjusted cash net

final expect deferral we Act million a of million payroll other impact of from items tax related cash restructuring, further Cares repayment costs. of XXXX, an fiscal And $XX X and transaction net approximately to benefits. $XX For cash outflows flow

we Excluding fiscal free XXXX. anticipate XXX% again these in earnings achieve cash items, to flow to net adjusted

we hybrid real given regard. earnings needs given estate longer-term our QX the with opportunities evaluate continuing developing this to insight to also our We our developments in update are environment further will further on as call work and

we $XX with $XXX year, quarter, of approximately have continued shares. purchasing last repurchased repurchased million. the we of to full September, million for be shares actively During as the After we week. $XXX million And approximately repurchased

with cash $X.X will debt. as see shares As $X.X in of and said and of the We quarter $X.X before, disruption remain of agile a gross have and repurchasing resulting in debt billion market. billion we net billion, the we opportunistic we ended

QX sheet. indication Our strength EBITDA a is our expected of to X.Xx adjusted clear debt net balance of XXXX the of continued approximately

of which expecting QX, we our As rate result, approximately we And our floating debt. is of end as going incremental the outlook. costs like forward XX% have incorporated debt of into are a interest the

in average a end rate benefit other of was into debt future the in interest will quarter, we included Early our the the fixed a quarter, notional interest in comprehensive expense. of rate detail from mark-to-market but planned $XXX of appendix rate currently is to of issuance. XX in rate future Slide interest maturities interest The fixed interest lock rate offset fourth of at money we fourth income our additional October, the we lock X.X% a million expected private X.X%. million $XXX presentation, weighted In Also, redeemed at the the notes on issuance. our of income the and As approximately related related and derivatives quarterly interest early recognized entered par. as expense rate to

paid Bob. the free given our XX. announced dividend which back I we end will turn remain call flow, sheet the on of Finally, fiscal and to quarterly cash committed we of now quarter strong XXXX fourth and over balance to the at October our

Thank you, Kevin.

Turning to XX. Slide

As to throughout sectors growth proactive multiple scenarios. through our we that economic business we demonstrate robust our aligned management, continue to portfolio discussed remarks, through have

climate consulting strategic response overall growth and advisory and to data with We rate solutions continue accelerators. enhance our our

two, on scenarios: of outlook we currency business FX more X are insight underlying providing our recent on under one, rates, FX based which an FX the greater based an of provides outlook outlook and rates. performance; constant Given volatility

the sterling for Although to compared multiple November pound is example conversion year sterling. reference $X.XX currencies, The XXXX pound average rate was in the for XXXX. $X.XX one full early transact we

As a XX%, On at both X% basis, to and presentation, rates footnote midpoint. billion XX% billion and to EBITDA of $X.XX, of is for revenue $XXX earnings to rate, XXXX is based million. our the adjusted difference respectively, in midpoint. XXXX is $X.XX scenarios adjusted $X.XX up release net in between Based on and billion investor fiscal outlook outlook approximately $X.X our $X.XX to early XXXX adjusted X fiscal on November, adjusted our $X.XX, $X.XXX these EPS billion for the fiscal EPS and EBITDA up average $X.XXX at the

our XXXX, now confident for fiscal EBITDA consistent Looking the growth, we with open strategic achieving Operator, beyond will remain call constant adjusted questions. double-digit we plan. currency

[Operator Bert Instructions] the comes from question first Stifel. line of Your Subin with

Bob to both Congratulations and Steve.

Thanks, Bert.

maybe Bob, start you. to out with

ended there double-digit of sort in growth. feeling about confident pretty You talking

those You If fiscal bands a on sales do and each provided segment margin exclude across guys by remain the FX, targets confident both segment? basis. of have impact still you 'XX in previously we a your

We stand we strategic we do, line. the we that in by we're Bert. on The in that markets those -- see 'XX the tailwinds certain, the made commitments that

in P&PS. terms and quick the pretty some really of a the we follow-up on And about seeing in made thinking you as quarter of positive just side. Should comments sort uptick Okay. things any It of softness you're to Or plan during the as terms material of on well just just performed expect slow -- starting advanced what of incremental facility clients semiconductor IIJA? side And progress in sort you through infrastructure you their as is 'XX? are the the that you segment, from a see spend? your

Sure.

So let the first question. answer me

we industry working whole the soft in, as The the that. in semiconductor a is client a spend, base not seen a demand geographies have standpoint the that of bit period. and from On we're

to end, front has of momentum the not work, that so the we've that course seen design quarters, the And X all. slowed the last over the X at

of where that sit about base. we comfortable with feeling ecosystem consultants we're client our specifically so in that, And to

that those have to projects formula as is had those looks well grants been funding to the as coming we base what knowing not So fruition. seeing bigger both locked element tracking development Probably that we're positive like. -- IIJA, the we the that that through is we of the are the release monies the On actually that the front. of of during COVID, actually states kind previously, specifically future unlocking funding up on

U.S. the on So infrastructure. overall, is and basis pipeline up the

is standpoint; X% are without from up of to so pipeline sorry, IIJA -- a Our I'm IIJA, pipeline seeing X% that. XX% with we X%

is William question line of DiPalma Blair. next the Your Louie from with

your would echo roles. Steve to to new and I like on Bob congrats

Thank you.

Thanks, Louie

profit you operating these Buffalo Group Bob, with awards awards be your the in several and acquisitions. KeyW cyber back referenced associated intel Critical And XXXX and Missions Steve level? Are the should accretive? margin For XXXX to

yes. that both period. are the we a about that I during portals question, award The that answer -- relationships coming or Louie, X X those specifically that acquisitions awards is and we those the Steve at through So made and spoke in through the had

accretive. now these those that we previous awards this And start. CR of when effect things of of So about we This in the on had it calls, is seeing in kind talked expected knock-on we effect that has quarters. side previous are lot -- an earnings are that a the the are margin flip had They that.

as do too. these see and catalysts margins that we for So serving are up going

The Louis, though, the 'XX high other thing, point. was

So into higher. strong. that margin the had We which that the back closeouts little some say is But one-off I XXXX We returning. the in would Xs, think business is underlying well had up say. were the I other underlying pretty events a bit some I XXXX, would accelerated getting in

not -- were back to maybe at to we get up quite but underlying consistent the all in XXXX. be the with we're XXXX think So I going to X% way

question Vertical with Research. next from Michael Your comes Dudas

we that you but want the Maybe in as book-to-bill. Kevin, the show you of for in little light? and more 'XX is to for to Maybe of numbers? as similar or up and margin ramp and later the move issues much out into that book-to-bill call And out give how improved a -- the 'XX, FX do in talk your or PAC actual in is awards can Or some you also you of CMS P&PS you about Bob mid- towards a the the to 'XX? of bit look end -- better utilization much fit better growth timing some gross

you up. having understanding breaking was trouble I you. I Mike, were sorry, apologize. I'm

your you the gross PP&S in margin I'm in to timing orders? could Kevin, relative you outlook Maybe bill, maybe orders what's XXXX? to in backlog, like and anticipate CMS your talked you do first, And what highlight the just talking book relative [ph] about of for So observations to book-to-bill. about those new PAC similar the just

Yes.

All Okay, got right. Thanks, that. Mike.

to profile backlog and margin as So continue good look, Places well. show & People

about very margin delivering So more got our I it's value-added of it. to with a When is think think part come solutions, critical that's the obviously, strategy. we

bit backlog XX%. margin of to up the utilization in really as better And to get was PA is we dynamic to QX in effectively well. the little also those PA there. -- continued of profile course that improve but -- So better relative People & a get We and to around Places early profile 'XX number the the the it's margin more it's we'll saw expect short back levels would fell continuing of to and we to that 'XX relative the normalized up that we over

next line of question Jamie Cook the is from Your Credit with Suisse.

my before for your implying to, you it's sort sheet long congrats, other talk I the laid Kevin, the Congrats, I you underperform, there? in And we portfolio? think, the XXXX, you're Steve. options? cash guess get can of question, to Or on flow talk shape. strong second over to of the consider And just would do good over targets generation Bob. first how CMS you long time see strategic sort of you continue term, in path margins get question, And if to importance you that margin the XXXX balance and improvement targets that -- the then out can CMS, is like quite a to to

M&A you're the to just how repurchase? versus looking understand share how trying So thinking about -- profile you're at

It's Jamie. Steve here, Yes.

obviously major speak can Divergent that the first highly most out regard And platform. and the the of we're to that. get I was recently all, of just these also margin technology especially Board elements remaining growth, small solutions around the in both about that accelerated nuclear, across energy business, see a to the remediation for with especially player that example, where entire transition data we, the an management excited just with the solution. side [indiscernible]. we've to of our CMS not talked new we're We're about as break becoming the That's into going been question cyber but around side Solutions the so whole especially strategy then surging but as So has clean in is really of And with know, reactors. you nuclear CMS wins you consistent, advanced X side, recent accelerators; a are new when build modular in and

business the entire about the in we're my And move as and we've far but into CMS done future optimistic we're as term, So, remarks as in the et excited as cetera, company about of to fit, those monitor we'll very mentioned we I continue the long past. XXXX.

point, in capital Yes, provides is how Jamie, we course about our expected over feel flow. of continued about us strength flow we will to additional degrees the cash the of XXXX, that cash freedom, that's deploy available. your that

monitor outlined we being we that how that can So and equalling we that return probably continue out profile would our in to during those ROIC are think in the were Got X to things as be the to feel strategy focusing to very monitor look, I like to our think we to strategy thoughts where we there and and see are M&A we're There result accelerators ideas opportunities. bid we'll an where ask relative clear so I continuing add front, appropriate; evaluated are that those obviously. out. we shareholders plays a and

also we repurchases. about course, that during proactive we've stance taking been on Of share prepared the talked the the remarks,

we're able when And so we to feel strategic a relative like positioned share dislocation. to there's potential appropriate to and/or be when buybacks well do act opportunity market

the Sachs. is line Jerry from Goldman Revich question next of with Your

Bob, Steve congratulations. and

you. Thank

Jerry. you, Thank

the just to next be you standpoint, in I'm years just anything wondering X your could high-level should strategic X mind? if talk that we over from keeping Bob, a about priorities

couple precursor almost obviously explicitly, company The Steve was Jerry, something the it been -- team been inclusive. and Maybe and and way a the has lot. executive comment thinking to question. comments I say the -- precursor that Yes, infer really very the tried been we've directly has of a about I've run to then

of all last by so 'XX as you strategy a the our not us a March one that's we in look developed that was even and And just when at 'XX, but strategy, that team. released

in that a feel and I strategy. strategy with me bought very have. not we new with to it's tied So coming very, in the

driving So that first The national the and world. clients. accelerators global are that big around have our priorities area the the are we

drive that's type client-driven business solutions. more going technology-enabled to And continue our so to up come we and as with

people. investments around in is our second The

at profile Our have we people time global if we've long. the versus outside have look decades. delivery But is the so U.S. again time a about people, of for our delivered -- people, XX-XX business weighted and you of U.S., around although our towards driven counted that our our that of over the profile really U.S.

the and and talent investments and really, is be the to really inclusion important. is going all to diversity sourcing around around last over well. the and how with those And diversified business. making is so world systems direct also continued business simplicity piece regards and that driving say Resilience from And resilience. forefront in of our our We've in company really -- our we we've key But have tried having our access as simplicity the the run to clients. but I'd business to

X So kind of segregated main areas. those in

Your Steven with line Fisher UBS. next of the from question is

month left current a about continuing on have the we So resolution.

risk segments? guidance continuing big see there's And across contingency in your then the lot to cross address what a maybe economy at risks? for I guess currents do resolution you into to the other those clearly do the of And plans process What have as in baked you've what moment. your global curious I'm guidance? any So you

my I'll here appropriate. some to then commentary first additional comments have make Maybe and partners add any think

over be this out relations feel I Senate that's team quarter. good a are the just given really things And the about from play think look, course House of review government the coming the deep pretty good we going we to and how had a about together. resolution, So continuing and the to going feeling pretty of dive how makeup

XXXX. well become resolved we into a going that calendar resolution don't there to the the end So that will believe that hoping near that year. be We're is continuing extends of

that we're starting bids to what resolution, some starting intelligence and and the business terms building awarded and I continuing relative get So in to alluded some -- comments on to to that momentum to Bob being of of think I as already whatnot. see, made regardless relative cyber unlocked

things X feel guidance. we into I it embedded combination pretty good -- And we So, the our think of that about actually. feel are those

the of question Kaplowitz Citigroup. Andy next is Your with from line

Steve and Bob, congratulations.

Thanks, Andy.

impair for the constant currency as before? think constant concerns? And the constant be should digits. PA here think was you're growth contract Or you that single in to goal does Does given large PA? from visibility double-digit recent currency So targeting revenue to around I but growth give significantly margin that despite currency normalize U.K. us Consulting need for you high mentioned you still revenue mentioned FY up double-digit when QX the you higher in we 'XX about a quite economic ramps XX% gradual you've towards ramp-up margin confident

but So the if XXXX. win over of you part the look ends course at large of kind is the building that of up ramp-up it certainly, of equation year, the

a the that of underwhelmed that some I -- it's direct budget impact actually activity our which and was I clients us U.K. much government the in has the in the of in level better. of by starting we've with on guess, believe recent and some less as we the being would characterize view But And -- is term to U.K. productive activity announced of our XXXX. is short look put so What activity relative the pressure to the do

start to last, that over XXXX, been kind we're into call the it, see to of So versus going we've some we're X what like incremental I'm months. momentum longer-term seeing feeling going to

we're So, to improve. that feeling start things will

pipeline and in burn challenges that. little mentioned to associated government earlier we're PA, starting as just call to away of The no it, is going backlog as the of the instance see with I'm going to the a seeing we're profile, relative unknown Seeing U.K. other thing bit but issue we the the to relative the, that that that speak.

just year-on-year. quarter in -- comment, some pipeline PA put was XX% last quantify Kevin's the to this alone Just growth to

the already the bit we are And since world, of So to too. way it's where a them, PA a grow. programs, continues engagements within consultancy, projects, pipeline we started evaluate pure-play the pipeline actually have

were that are Kevin on programs these Other referenced. announced programs promising that actually budget now. and in are the that as Jacobs PA So partnered as right well the

of So the realism what's hence, some there the -- on positivity that's along bit down. with of of gone couple last months

Sean next is with from Eastman Capital Your Markets. KeyBanc question

what whether rough to still new maybe trying from this to be a confirm fiscal expectation perhaps as I Divergent in to an initial quarter? first a out just anticipate advance Solutions starting that, we broken outlook get is segment EBIT 'XX to as contributing to just that should perspective? wanted business line And in the of

executing on right promise a operational the will reporting we effectively now is to relative financials. business as that we that separate and the So against made be the segment

Sean, do So on track that. to we're

all -- expecting we'll provide growth the time, think a provide that. And areas pretty to our the what profile expect rate. are a it over XXXX. large But accounting the because day, make of lower we're XXXX of be are QX the I will still lot margin that exit through that end at a little So color of mechanisms details that controls effectively, we're a going working bit systems will growing in that than change. we to at be the in for company in highest and the substantially sure will relative we'll the it's that tell of to commentary it additional reporting be But in one place you accurately we're will because I

Bernstein. Your next question comes from with Dillard Chad

on opportunities about capabilities digital margin you acquisitions work? increased your was of of could for just guys infrastructure expand about just should and like you wallet Maybe new and sort projects? be the what these expanded of can I kind some some So just of in for recent hoping on share weave talk the we thinking

were Sorry, question? there. a Can Chad, the you broken up you little repeat

Yes.

wallet expanded just that can business. in in infrastructure capabilities? expand sort on you've terms And digital of like had of what acquisitions share your recent the opportunities some you of maybe as weave have you incremental it So into your

that -- was part? Infrastructure, Okay. that

Correct.

Yes, got it.

talked talked Okay. business I'd and international but profile a with energy towards around sorry, heavily -- water seeing I'm driven growing grow. opportunities transition. continue but geared transportation to this Kevin about and international In U.S. we're Steve infrastructure, broadly the in mostly the the about say the

are And Environmental of X so those main the to be kind areas. continues robust.

So, before, pipeline talked growth has those strong. we -- I been mean, I the about really, really see

the last different did, driving thesis immediately seeing data the we probably acquisition. the was had acquisitions, we deal all StreetLight it Data a And data-enabled business for clients. And the smaller where that's before, perspective; a in one then we're StreetLight cite around clients had kind was in On that that's with are state we that around anticipated solution looked in that as seeing a of a -- order firms They they're very type [indiscernible] fit our on that sector the predominantly have project making our news private the at front. investments U.S. data utilization use different of private the been to capital sector so in positive too, DOTs that from but relationships. of expanded

Michael question from is with Feniger next of America. Your Bank

constant single on currency a digit high digit mid-single believe I XXXX basis. or you're guiding growth

some sectors, really robust hydrogen, life citing autonomous. You're EVs, sciences, reshoring,

So type of get isn't How growth move that there of we XXXX? off the reaccelerate in the further what Does about just growing you Does that with longer? portfolio? operating just organic project XXXX? into take momentum actually think that better it Is higher forward fast XXXX, we in leverage in utilization? [indiscernible]? should growth And as kind profile

the United growth start burn [indiscernible] the think the think bottom Bob takes example, that pipeline build that It of think in you that's the for it. for then currency a I the in terms won single And digits and quoted is to if of constant line pretty States growth of in Well, to just high actually. kind of about associated the near growth, look, be look, -- I kind just with XX% strong while pipeline.

So be sometimes against they're we you're relying your And ready clients anything execute execute. on not as else to quick able as are are as as you to much to that.

we're prudent So think growing I going build assuming to XXXX. a think that's the over of momentum. how look, I it's course being And

do on quicker adding a X all for markets advanced where today profile, about has talked that of the we're growth. have growth burn a been catalyst while us Kevin, facilities in that add, those could end I If

think be constant top So line did line double though currency were did on basis, our say the growth numbers those a that we -- would digits. might quoted, in I be bottom

the So in portfolio. there's I think some real optimism

with from the is of Your Gautam next Cowen. Khanna question line

Steve Bob. and Congrats,

Thanks.

you I up of are wanted fiscal exposure are up up you think Can -- noteworthy at recompete those? some just on opine CMS sales and the the maybe percentage even recent if wherever timing of maybe frame in lumpy contracts for any there individual that and on following questions. Or rebid? it's of 'XX and that

I'd our CMS Sure. the gotten say only there's in real that in is positive of I some and -- a -- business that predominantly of 'XX to recompete already those exposure are ones moderate it's We larger low. say we've some couple. indications

'XX. characterize not as would a that I So exposure in big

the only at one big we we've -- The -- about is feel but called one position Kennedy that's there. good which a one that out our

line Andy of question next the Baird. is from with Your Wittmann

unallocated guess results corporate as maybe bit Steve on a I just $XX quarter expense you. well. was million. Bob, I clear. wanted I thought for the yours question promotion, And little Kevin, Great. to here your a understand congratulations fourth

of than suggesting to be for I as of for as the 'XX you quarter $XX is a run rate per about that higher were think quarter. your going kind million implying it guidance well was

called you incentive I wondering, So out comp. was I guess

down FX an number mentioned quarter. keeping also that You impact, this

on that hedges that nature that FX? something comment had that impact? quarter? there was of driving was you in accounting And what Is to for benefit that could the was? Or a the like of in else So -- thing that was the you size the FX noncash there some

if the you specifically I we with think the Andy, can have are certainly, don't outlined corporate-related dynamic that. our -- dynamic support costs embedded No. about FX follow up around world. you, the it, But that on Look, costs but

translated so if for corporate-related U.K., they're you into a lower have effectively, effectively. And rate getting costs, example,

and corporate go value it's had not associated all and down it's because the costs So some that revenue. corporate benefits us those effectively of effectively with -- costs

ensure but So that look, if dynamic to you currency the to the be taking two. currency challenge in that continued get company. robust the for very reported proactive established known the that we of difference have reach we And the terms knew are levels we that had commitment constant then we between steps was a and the we still

to So and of very we in very, this attention cost terms management proactive QX. pay of the during structure our

from Capital of Your final with Sabahat Khan the Markets. question RBC line comes

is if up, starting of around Kind including other to commentary pricing is the I think pipeline with earlier you assume how the next building about much the just understand guidance the the that I do how to moderating, IIJA. flow guess, guess, I bill we some the Just, offset maybe through, and expect, want backlog maybe ones grow? months? it what XX you've that to just course the over it in continue with to to guess fair trend funding of to could provided that you government today? XX extra have I embedded

on incentives show can backlog you our I very that, year-over-year. to metrics. you growth one you will of that based continuing I may incentive are assure backlog our tell Well, And as strong know, is

on we've you more like company tremendous backlog is one put drives could just I a been Maybe to we've a sales-driven amount since inception. which add for thing, sales what at,

Dr. started mantra. I that Jacob think

sales-driven our -- Our as we've has period developed the now investments recent has and portfolio time. been most Chief the of very well, growth made, this as Officer [indiscernible] new our specific Growth over very, period

our full effort grow; effort pipeline to sales so continues timing putting is the good. on the So we're force as

There Pragada. are turn back to will I further questions. call now Mr. Bob no the

U.S., a have upcoming call. to the and looking on in Thank joining I'm Yes. forward progress our Thank events Have you you. -- wonderful of for for calls. our updates those and you, Thanksgiving. providing further a everyone, earnings

Thank you.

gentlemen, today's conference participating. concludes thank call. Ladies This you for and

now may disconnect. You