Jacobs Engineering (J) 21 Nov 232023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Chibrow, and I will be your conference operator today. At this time, I would like to welcome everyone to the Jacobs' Fiscal Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Jonathan Evans, Vice President of Corporate Development, Investor Relations. Please go ahead.

you. Thank morning. Good

was a announcement reference morning, we and the Our presentation filed on posted slide we'll our have call. earnings this website, during which

refer today. Our material presentation about and would filed will statements information Slide later forward-looking financial XX-K like of be for to non-GAAP you our the to X I measures.

to agenda the on Turning Slide X.

highlights CEO, by Speaking our flow. on cash activities from will CFO, begin providing Claudia Claudia a overview and fourth will and today's review metrics and call of more our summarizing well Bob will results. quarter in-depth of Jaramillo. Pragada; as sheet a be our recent an Jacobs' as of provide balance Bob financial discussion

then we'll up for provide call will open on questions. Bob outlook details and along updated the Finally, remarks, our with closing

turn it to over Bob our Pragada. that, With I'll CEO,

Thanks, to us business for Jonathan. discuss fiscal Thank and our XXXX day, Good XXXX you and outlook. performance quarter joining everyone. fourth

continuing strength, people Our outstanding for team our of remarkable drive our shown continuing of results caring has dedication to adaptability heights. our to I proud new to culture deliver clients. am to and and

past our growth the structure model, move to business simplify accelerate results. couple optimize quarter key our we Today of business our Slide shared fourth Over X, on boldly have provide an profitable move marks expansion. and intent intention CMS point margin and a the to update want our cost we quarters, forward. as turning to announced before I separate on our to previously on I

will the of & creation government Solutions opportunities, announce robust businesses, industry-leading following are communicated, all of services be excited a Cyber for shareholders. new combining and Solutions government assets our the as Amentum the a Mission services largely we has a unit As tax-free separating combination to with Critical leading Intelligence we player. Jacobs of a to those then Jacobs' a and Jacobs' been of merger, structured Morris is to intended Reverse Trust. be which Divergent through spinoff shareholders This by evaluation way

government an in creates combined combination realized year $X.X $XX Turning to $XX with billion combined X. X. synergies $XX to The billion a net including EBITDA, be of expected services to technology by leader million adjusted Slide million revenue and of approximately approximately

value Jacobs XX%, equal between of the well to $X Jacobs billion our retain XX subject as close. a will achievement disposition retained shareholders company customary will closing. additional adjustments of X.X% receive also to operating Jacobs prior the own targets of based XX% dividend, and stake profit through combined on stake of will within to to an cash as a months

shared the overlap separation synergies, Solutions As & Intelligence and part strategic to of perimeter, it business, was owing unit include separation with Divergent to best of our the including continued CMS. the majority concluded the we Cyber efforts, in operational our costs

We will this best strong drive growth the and leaders with market infrastructure-related end fit assets and value. a business our and ability Divergent The and the has realize supported believe significant exposure opportunity critical shareholders of industry the expertise We breadth is facility culture their operating of strategic advanced scale diverse to meaningful to with offer of by added synergies, growth secular long-term cost innovation combined and who high-performance Consulting retain businesses. software strong premium PA platforms, share Solutions, infrastructure, X combination given trends.

year close the XXXX half approvals. and Amentum, is the as Jacobs as comprehensive transaction is closing of financial regulatory a Board all not of to customary interest transaction subject is approvals. to to second in the believe approved The by been transaction we best fiscal our company sponsors any and subject and inbound the conditions inquiries, well of has unanimously shareholder of in After The review other the the stakeholders. expected

the deal, regarding the I details materials the earlier. structure more to invite we For you published review of

Slide shows multiyear which Moving X, transformational. our to

more the are in of results separation XX focused Jacobs, which be we executed over next As concurrently strategic optimization months. announcing this part a plan a to cost

time, basis more XXXX expansion in margin XXX adjusted points we of at as-reported fiscal least margin an her to Jacobs. compared our driving will in prepared target Claudia forma results, which for XXXX During of EBITDA will over year year fiscal remarks. expected XX.X% as share pro details

balance will as sheet Fiscal Post and we marked we revenue X XXXX play begin free chart to independent critical leading and growth sustainability potential. look a with infrastructure well-capitalized a pure transaction, XXXX our and records flow for be forward Jacobs for and leader as to companies. Jacobs, significant cash forward generation strong path

another X year XXXX capital Slide advisory. conversion remains operating free return a behind record to our in report response, revenue while in this entirely drive like flow as I'm to solutions quarter to and is again QX. reiterate cash to business remained and us both organic. model by accelerators, to and of I consulting and that cash fiscal and to QX, robust profit. investing once our record pleased growth Strong order climate growth allowing would shareholders data measured Turning hallmark

We flow recorded $XXX XXX% to free underlying in adjusted in FY XXXX generation. of a conversion cash million on cash record income net flow year free

of than again separation the impact XXX% greater in restructuring, generate and cash underlying conversion to free FY XXXX flow costs. transaction before expect We

excited remains markets. outlook and business end robust our very in healthy, opportunities underlying and all we continue Our about growth to be

X. Turning to Slide

on provide in with line delivered year-over-year Our growth business further significant global business XX% our of adjusted up adjusted People and revenue & growth accelerating units. net details are Claudia operating profit XX% up experiencing line the top Places we year-over-year. will

positive which see pipeline of in to again, growth continues our growth a year-over-year. in indicators persist grow at to expectations top and mid- digits widespread X% organically backlog high gross Once our our than 'XX. continue provides with confidence profit and We faster visibility to can single that FY line,

significant quarter. continues in be wins, to water of Of highlight the data to of digital I pillar showcase Of capabilities. sector. XX wins that Looking a our wanted top quarter, and X X the highlight the were P&PS our the organic growth double-digit those in our want with achievements to back Water at every business. in business we FY OP 'XX,

Firstly, a our and the product, Farmington, of wastewater part energy surface efficiency. of the plant, improve key efforts is New AquaDNA, Mexico to data-enabled resiliency treatment and city water at solution provide

new Secondly, the for see plant. industrial market, likely we global largest enhanced transportation, In Europe's renovation The Germany emphasizing projects lead International replacement maintenance International and to a Airport create Sewer we Seattle-Tacoma space, expertise. In for continue are we approximately It IIJA our effort our transition Overall, represents largest our clients to one hub. momentum plans. model mill the leveraging most billion that and Boston In the of energy the and been increased site Seattle related and manage were year-over-year. hydrogen is worldwide. of $X.XX also selected as XX% XX-year the decarbonization our of are analyzes decarbonize QX, has mill funding. IIJA-related largest with testament position its from the green efficiency tourism diversity to mobility a business steel the selected terminal, the and Water manager broad-based data-driven fail, and upgrades power assets to pipeline is helping a the Commission, to that to steel Thyssenkrupp energy has Jacobs as in program effort Duisburg, AI

in of see East. we high Internationally, levels to Middle continue activity the

damage in terrestrial remediation example, management are For to Arabia to program ongoing National part we repair The for climate Saudi Center and forms program providing to work environmental the services Compliance. response, their Environmental environment. coastal of

set opportunity environmental a Our is climate-related to expertise clients' and we global, truly robust challenges. related to continue our see

In XX% higher CMS forecasted was and expansion. behind well of contract FY resources in QX XXX This U.K.'s X CMS, profit XXXX we project increased and Generation a nuclear XX% outlook to output. robust performed which great cap EDF prospects approximately CMS with off stations, awarded bps of very management minimal account with electricity award year. framework for was and of the revenue pipeline new in licensee pursuits. Nuclear operating growth QX power recompete major X% remained year-over-year, a margin

Consulting to XX% XX% growth strong margins very despite nearly revenue a results continues post profit challenging operating environment. PA with and macro

Christian has new Norris led the that new of by improved pleased PA Life with and partnership unit the with a CEO. weakness during as delivered operational as to While respected ideas has creative Utilization leader the formally heights. and its some Christian PA's PA take QX, continue team. we externally performance of seeing, Sciences PA internally to and Jacobs are to strong peers be both cognizant we appointment consulting remain the announced

power digital bringing the support to deliver sector the opportunities and of future-ready continues to AI fast-growing city's of modern is PA, Together tools, solutions evidenced Metro to infrastructure with the as rail Copenhagen framework. are Metro deep and further our as knowledge award enterprise Copenhagen driving our travel in example, relationship urban meet we For recent it demand. to the population our the

Divergent affordability. revenue delivered strong In operating Divergent, we radio AI of IP frequency arena. cutting-edge player analytics, the a as the An a of are operating introduction Two, space year-over-year portfolio with reinforces the space and quarter innovation revolutionary leading detection signal and with X% leader that Solutions formidable example net profit. CMS a adjusted utilizes machine growth Our in a independent unit growth Mango in learning XX% in system emphasizing that

sectors are extremely we for excellence. growth building well off leadership X. and our all Slide we Turning position serve, record to proven across the In established positioned of operational track summary,

companies. the next chapter will be independent leading history excited where on creating We to turn X are we this Jacobs' page in

our in Looking a With operate in to enthusiastic base, leader accelerate in simplify sectors growth and the structure, opportunity in global and further the improvement leader business margin Independent is optimize announcement, ahead. the and of years industry. we overall the we about are quarters to Slide cost a majority today's Jacobs XX. our which and

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

Bob. you, Thank

$XX Fourth for profit GAAP $XXX to noncash restructuring overview of results. million year-over-year acquired estate XX charge Turning related our X.X%. a financial grew and revenue transaction footprint. fourth to quarter million quarter and quarter revenue $XX the intangibles, included gross grew other separation-related our net and amortization million for operating XX.X% real million was costs decrease $XX from of in adjusted of Slide

CMS. restructuring separation-related costs and million of the related are separation with transaction costs of $XX and to advisory other primarily associated other The

incurred our forward, be costs now separation. with include to go expenses will connection we in As the

million related fiscal to inclusive of unavoidable will of key this onetime separation that a to cost be largely associated XXXX, and want but ours incur costs minimize focus Looking to in adjustments costs are These actions. I onetime of it and we optimization post-separation, separation size, approximately expect restructuring year transactions $XXX costs. the in to reiterate a to

reporting $X.XX the other tax align from charge adjusted intangibles, transaction, Our restructuring $X.XX related was a XX%, per review. basis real rate. of our points was adjusted XX GAAP included adjustment our the acquired amortization operations up impact effective I'll reducing and related during EPS $X.XX discuss operating charge and $X.XX to impairment to noncash the share estate a to footprint from dynamics segment and year-over-year. a annual $X.XX margin related underlying costs; to continuing

I to XX on refer for these details more adjustments. you Slide

X% these net tax up the company's was QX GAAP XXXX. XX.X% is items, fiscal year operations $X.XX, Excluding continuing rate adjusted for representing million XX% revenue. fourth of and $XXX EBITDA XX% effective was adjusted up was quarter for EPS year-over-year, adjusted The U.S. year-over-year.

and reflects for per tax quarter, and deferred adjusted of as and per charges Our amounted a earnings effective impact an assessment. rate effective quarter year In a audit the U.S. XXXX for the allowances fourth to these tax result, EPS from $X.XX fiscal share adjusted XX.X% operations And adjusted rate. include share. year tax tax continuing valuation GAAP certain

X% with backlog Finally, increasing X% book-to-bill up year-over-year. over profit was just year-over-year. ratio and was our gross revenue The backlog Xx

full driven a in Fiscal holding profit growth brief profit, our year revenue XXXX primarily relatively and performance. was Moving flat. to while year strong $X.X gross grew GAAP up year-over-year, XX for X%. significantly by grew Slide of G&A XX% net year-over-year, operating gross revenue billion, recap

up profit Operating driven was EPS XX% year-over-year up a was basis year-over-year, segments. EBITDA $X.XX, and $X.XX operating to revenue X% points X% EPS billion, adjusted X% Adjusted and respectively. strong and X% performance. profit was X% was profit expanded currency. underlying and operating grew GAAP currency XX.X%, basis. constant up adjusted in increased in up our XX all of business and $X.XX, Adjusted Both constant by margins on

As adjusted XX.X%. a net revenue, of adjusted percentage was EBITDA

modest adjusted G&A. and operating of a We XXXX, a in margin driven expansion expect margin higher revenue combination fiscal lower by corporate mix

and margins our structure. XX-month greater cost operating post-separation However, basis, book-to-bill we expect was model X.Xx. year in as approximately uplift we even fiscal streamline On an a trailing XXXX

XX business, QX delivering across lines see Growth results. revenue year continues Regarding performance P&PS of for year-over-year. with all to net performance. solid Places profit Slide People XX to operating full our units. revenue performance XX% Starting Solutions. was QX and business adjusted let's turn & and was the of momentum strong strong up consistently for

XX adjusted to continue year-over-year. in XX%, quality. P&PS points Europe positively Pacific. in driven weakest our Middle was and up we growth, QX being basis healthy gross strong saw backlog Backlog focus an solid although Asia and the relatively business rebounded after continued and year-to-date, Americas strength region year-over-year flat was up margin up management resulted X% maintaining margins improving operating we as was on East, by G&A XX%, margin gross in sequentially, profit of operating

year, operating full XX.X%, basis year-over-year. up adjusted was XXX were operating profit and up margins XX% adjusted the points For

which a to Our Asia from Giga unit, pursuits. the bright client revenue, and and local Middle supported in benefited and continue healthy portfolio Internationally, drivers by Cities spending. is the P&PS propel water spots largest to strategic budgets state be our Pacific East by legislative Americas continuing and

business sequential Additionally, a growth. showed our European positive

Mission up very a continues Critical strong pipeline X% areas. QX business to demonstrate rate a up healthy was year-over-year, the all focus against year-over-year, is backlog and moving revenue Solutions. of Now win in core its and to X%

margins were basis CMS XXX operating year-over-year. points up

continued year-over-year. flat, rebound year full profit the forecasted. roughly year, operating Notably, were the as margins increased For margins throughout while X% to

Solutions. increased X% Divergent in revenue Adjusted year-over-year on we focused net portfolio remain as to improvement. QX Moving

accelerate XX.X%, XX.X% a and lower-margin backlog. up sequential to of investments basis year-end growth roll contracts improvement. margins -- for XX expect levels We from quarter as mature out point Operating was was the

trends, Revenue X% XXXX. QX expect year as PA to was revenue and of through from Based election we to XXXX year goes XX% remaining increased while cycle. in PA fiscal booking up risk show a macro the in year-over-year Turning fiscal Consulting. year-over-year trend growth cautious in U.K. on the positive an

up term. to medium up expect XX% and operating the to improve, PA's year-over-year. operating profit and QX XXX be was XX.X%, Utilization we over points basis for continues XX% year-over-year margins

QX, structure model. unallocated evaluation streamlined CMS roughly adjusted and with Our costs were a corporate conjunction we a more with comprehensive in of sequentially $XX our the initiated flat In guidance. separation, million cost under our consistent business have

temporary Jacobs, this actions $XX we enhanced including cost our initial our despite However, opportunity carry million in to be reinforce business with businesses period. associated the supporting taken, separated. of throughout cost clients the we estimate to entirety the will This allows costs We commitment that us transition approximately are resilience. and temporary to carrying

independent excellence will continued We that confident as a foundation efforts companies. in to these our serving and contribute are X leading stronger clients

$XXX flow which and very million to Operating discuss cash our is generation, million. of and Slide balance posted strong We XX indicative to flow was was earnings. the cash cash $XXX flow of cash quality Turning our sheet a flow. of quarter free

anticipated above underlying year flow cash reported to and for the cash conversion with As targets result, deliver we XXX% were XXX% conversion. our a able adjusted

robust pay shareholders down year cash flow we free fiscal total to were During CMS both Though utilize the and $XXX due a strategically flow ensuring unable floating separation, more returned our quarter XXXX, repurchases shares cash financial to future. to the debt, for for million repurchase we of in XX% the a through rate dividends. of share to we position

billion, of net This creation disciplined and over gross the with financial our billion debt and We for debt. of $XXX million $X.X our with quarter of in commitment just long-term approach aligns stability $X.X resulting shareholders. to ended cash value

a approximately sheet. of debt remains and X.Xx XXXX announced the strength of balance indication remain post as investment today clear our business, focused continued Our both EBITDA adjusted maintaining our of an separation. We to profile, to committed more grade net QX credit CMS a

rate with of our portion offering us we August, outstanding a of revolving a In allowed in $XXX repay the fixed amounts million due the XXXX notes unsecured facility. completed credit senior X.XX%. to under This of

floating As our is average was approximately QX, and of approximately of X%. XX% interest to the weighted end tied rates debt our of rate

coming rate intend in opportunistically the to retire quarters. We floating debt

our the For additional interest of the detail benefit, in quarterly presentation, on your appendix debt included have expense. and we

strong sheet we returning our flow, a cash On committed and X, shareholders. cash free November balance we $X.XX to increase. paid Given dividend, representing remain year-over-year to a XX%

opportunities cost Finally, I optimize cost post that CMS recognize high. on separation. wanted see our Slide And to structure optimization the we highlight our quarters coming We plan XX. in shared to is and

run action. savings, the over identified we rate to to are million specific and have that costs We measures lower allocated including corporate in $XX starting

We costs stranded including full $XX post of million $XX around million per from per corporate expect unallocated quarter approximately to to reduce our separation. elimination quarter costs

us clients. are focused model growth positioning towards efficiency staying our while and cost eye an with We operating streamlining our for on

we This for and growth margins EBITDA strategic of is best-in-class as undertaken from for industry margins longer-term XXXX. XXX EBITDA we in reported believe expansion stand-alone bold standalone aspiration points plan, results at our long-term fiscal can Jacobs adjusted an on is our over XX.X% to we to While in margin XXXX basis This will not yet margins. least of deliver beyond margin fiscal XXXX XXXX deliver comment it a adjusted expectations fiscal expected Jacobs. as year

quarters. Bob committed and X I closing, In things over the are to next few

our efficiencies First, in profitability the and demonstrated our targets. as margin maximizing by driving business

growth. financial multiyear resources flow needed Second, position free for in the our business cash with

Thank deploying to Bob. discipline the you. turn and over capital. call strengthening our shareholder will Third, And I

Claudia. you, Thank

XX. Turning to Slide

throughout to growth for remarks, remain ahead opportunities robust accelerating businesses. discussed committed we As we all our

the our relevant been the have companies. more emphasize than It's ever that never stronger. to fundamentals as is macro of business Given uncertainty, plan strength as for independent crucial underlying today's X global future that we

'XX fiscal outlook. year Turning to

of billion billion EBITDA the $X.XX, year adjusted an expect growth to full EPS contributions the XX% respectively. of outlook midpoint, This adjusted $X.XX X% to businesses be a to $X.XX and incorporates We with separate. the representing $X.X at of

We 'XX expect XX%. a of rate tax fiscal effective year

a during support mentioned, historical not XX% negative will costs approximately carry and elevated to we an Claudia QX. this We through EPS effect continue with is will earnings This a believe viewed in costs to clients of be necessary as progress IT on as corporate stand-alone temporarily to CMS cost company shall adjusted the power. we seasonality, are and needed have support year-over-year transition As coupled This, period. these previously including overhead temporary our support. separation, nonrecurring reflection

We are the well for to we as seek positioned our shareholders. share per to growth years in accelerate profitable value to come compound

excited creation. We the and will in Operator, value turn CMS, plan over about now for call for continue questions. Jacobs and for be energized the remain long-term future confident to and our we

first comes Instructions] Your Jerry [Operator from Goldman the question Sachs. of of line Revich

ask loaded just all terms is be expansion back-end the that work pieces a just on if 'XX, just of just would Congratulations I the we a basis about little XXX points Can here. helpful. little flesh out that and in just of bit more the the terms of timing, we relative more sizes, in bit 'XX talk how that unpack the versus the strong a margin buckets Can and targets. little bit

-- some of Jerry, you so like I on the details would slide. this have to

And the of this so me just let slide. go details over

of component have a stranded the cost. So you first

the separation. happen will that one after So

see that roughly you that's million So there. $XX

operating is So started the separation, model, and will we've on obviously have that after already really to the action that. one action, which accelerate then you taking but that taken we

after talked see overhead separation. we separate the in 'XX I of remarks, -- it that normally million the the time that see down as have corporate $XX the line. prepared you'll unallocated So I or then mentioned in a And $XX And about my normally as to some million. see you accelerated and over you

you'll independent carry one company. in some the temporary company accelerate XXXX. the combined We we as CMS to support will costs And as it prepare for that well, or

lot to a 'XX see the and layers in the a of is that, what bit -- little you'll of structure summary, really I simpler support give in general, separation. is management want support and the just IT, the support. a the accelerating So after in nature is you If

in just out segment underlying slower looks that Okay, -- super. better on faster relative than And People how to you to versus laid then year ago? expectations core that. Can the the Places & cadence ramp us out How what the XXXX over folks that than you just expand a laid what's margin or plan? you that's progressing

Jerry, we to continues. expectations Yes. changed. laid regards that time hasn't period, the P&PS What out over in year margin strategic ago, With that a

question comes Chad line the Bernstein. next with of from Dillard Your

I cost we anything to continue bridging on wanted XXX CMS? just Divergent out? from the comes was thinking bridge I decision I today be is to comes how the margin include you So much from, about else How much points, versus Solutions hoping question. the should that basis And could XXXX? when the guess, there

from million costs rate rate the and of run is million run then post up Jacobs, the is which XX.X% Intelligence. And that is unlocated the separation. of the the excludes elimination so to operating are nature full going Chad, So $XX run & corporate which mentioned really separation, total to those the and then costs it then before, stranded Cyber I in million rate the X stand-alone CMS model, and $XX buckets $XX

half in Chad, coming model higher margin with the a if the buckets, line in half is it business. of a that have is growth and will It's from higher margin more operating in if to that's mix. Chad, buckets, and coming we expansion X X type margin, you structure take were cost you're of from taking business

think So that it simplistically about way.

Got you.

was I maybe a helpful. excluding backlog then backlog for And growth, I revenues. could just margin hoping on in you the capacity that frame growth. by X%. appreciate question is That's gross backlog growing you Okay. But

strength versus versus of you People to & the pipeline. And maybe some then puts what were really weakness seeing size the trying Just underlying you're that the just talk understand Places? the can in of about takes,

our we're where we're right? It's Actually, strong We growth kind or to project based life models. in actually of P&PS cycle. I be deep that on now. large in and Yes. Chad, right project think, on infrastructure really it's when whether I advanced it cycle, programs, think a lot business going and revenue burning we booking into so booking it's measure -- revenue And a higher are be the facilities jobs burning life really weakness. don't

But business as project into more profile over to value the continues program executing world, our consultancy a higher we're cycle. life and services

you'll into life So lower when depends and that cycle revenue, it come have opportunities higher margin backlog, on is. program just

about before, of So which faster rate. in are we've kind talked it one of is the we accelerating at to cycle I'd some that the where of a spends. tie

the comes question Dudas next Your from Vertical Michael line of with Research.

Bob, maybe backlog. pipeline maybe share touch of could the of you a

client on your As the see providing How to your quickly touched And X in water -- project the project you're some mix will to maybe X new going opportunities you be entering areas noticeable for remarks. model some What you run maybe you years? the growth? how of as management that interesting the in or through of are that XXXX type service over backlog how revenue the the in next side you're much other of prepared to that base. on P&PS, consultancy of be we about mentioned change

kind we're to kind revenue of of our secular some -- parts. end type two other consultancy question that fair? business Mike, we the about of see continues then Is what part that grow the trends One, models second of is asking business. consultancy And around how as So market you're the do seeing? are

talking Yes, to the drive mix you're that, about over better your... that

sure. Sure,

our other The mentioned XX top I wins, verticals, in X water. are of

ones big water facilities take markets, and you both half of in top of facilities, X advanced sectors, -- If advanced were it's XX too. those the

see probably driven sales from goes world, our strong market industry. out the so within there. standpoint So semiconductor we to as an in advanced the within to bottomed continue clients we as far through Keep continue mind, facilities more spend as now activity end

job, advanced is is the But clients drugs on for our we've strong. facilities energy transition. we're grid and I be life but the to all is that specific now component with a had second in going highlighted and and we to I'd in whole a of of with of kind that which that's years, that, the part. we're consultancy highlight seeing, continue the And sciences piece, see a everything strength then GLP-X segue strong modernization that going the others, to

it, the that, independent that kind in continued Jacobs, early of is say our that. portfolio call innings would of of we're profile now, I within

And balance. that so But going I'd to next X, a a the about very that of be it's expansion to over conversion to it's Claudia cash post X years, say beyond X talked course component going margin with 'XX the what or even drive that's high.

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

could temporary impacting what through of happened EPS the to your guidance your I results, adding the in more that if we weren't billion know to for what mentioned but would that just sorting $XX us because quarter that guidance $XX exactly below you color simply So in the QX was 'XX EBITDA of million deal, of the and a lot below and you range, announced end upcoming into give billion there's to noise the low get expectations? of your you how $X.X been carrying be your results. that's RMT? costs have Should back doing And you're million $X.XX previous

Yes.

So with the half included is the in is and let's And the piece. some remarks. I them one, -- big roughly had gap which of my tax of Andy, start explains the one first so I

And to when and have the other is then could is a piece. the allowance, this the it with the unallocated going I be overhead repurchases -- $X.XX, more happens tax. or one, So is -- we and basically stock big I unallocated. do something transaction. that one-off deferred it's costs on your next -- so it's we if so take, one And you quarter fourth then the share mentioned given call That's why corporate based count, the in

operate that's level as a Then that unit the we carrying that what commentary CMS the & I of to prepare at high the and independently. cost on is Cyber So temporary we're means. that added some Intelligence

that's So the you if puzzle, piece the other of want.

the million to to if is doing not Or that you think that? you it $XX weren't you that right Claudia, is like that EBITDA? would -- again, could RMT, to add say debt right

to what client-centric. we the towards We're value successful. that the very -- new quite costs. get have leader we that's -- the those this a we be. to really Bob very of preparing power in transaction to we're is a And want to bit we that entity. Absolutely. exclude additional going should we're mission, It's want in to sure we make transaction It's clients' this and the that included mentioned sure We have and that temporary. to our make end, the X and very continue that's that upside be to tied that and the entities And temporary value our earnings want

Just to clarify.

guidance the carrying end I So at the EBITDA that in we're guidance. gave it that

P&PS, Bob, And Yes, up then, clear. that's year-over-year XX% revenue net in just QX.

confidence backlog rate think mid- you the to growing so fiscal sort FY geopolitical And and projects with P&PS higher of high you the I that stimulus, between good are do on. revenue you have risks then at you in about organic confidence, how all Could said balance elaborate 'XX? or single-digit the in you impacting you mentioned IIJA and that thinking interest rates on growth. see

Yes.

I think Remember, P&PS. within got the answer high on really mid- to growth single-digit a the think nice yes, backlog is question, we've of will continue. my piece that diversity Andy, I

drivers of about clients of supply full rates, might global the some some whether technology-based they drivers political immunity, continued, science-based that affecting clients, and supply there's chain to private continue spend has driving chain or be think happening a be I been really or of our or with just So the if private because sector sector -- but our performance. that's the what's when which based, technology-based not risk we interest say

As far as seen infrastructure outside IIJA U.S., have effect. we or not a that energy around transition larger the

fact, this grow single-digit base to very In to pipeline that's a mid- is continues on percentages, our and high high. at

Stifel. from of the comes line question next Your Subin with Bert

maybe that, a Bob, think backlog I of taking more that was question. just

for you're the organic P&PS Remainco, the remain thinking company that can outlook to for healthy. organic intact? you digits? the facility very previous was advanced in you us there. your remarks, And for to Just just the coming think CAGR, FY on XX%, profile this the said range You year? through a Consulting prepared side, remains with about keep double for in growth you Can positive walk Do growing those XX% at pretty PA do X% think 'XX X% comments how

Yes.

yes. So the is the Bert, answer first part my question, of

GLP-X, advanced several, I are life fact, in I they of space, these would lot underlying semiconductor It continues whether wave it's mentioned also at the that on We're the an I standpoint, some sciences stay or now to A high in strong. neuroscience highest other facilities, larger programs, there probably of in the the of are growth of is therapies -- been. and oncology kind from but the we're that next account say it's the a projects -- very level. run, space seeing novel be think seeing.

will high. far stay So the numbers numbers as stay -- of opportunities will as

life there's cycle X down kind project One the imagine they coming saw. that curves. are will way of as as in far -- kind is the of we Where balance

to your which just of Gather leads work. XX numbers kind a of to that sorry, I'm there. coming up, XX-month to -- everything XX kind I said, XX- others The reset

it. Got

And Okay. into the level deeper just P&PS side. maybe a

the of rival do IIJA starts you to us thinking expecting of guess, and positive world the As become the in we're opportunities. you're what about, and sort can disparity You Europe less on from how Fx sort on the seeing I remarks viewpoint factor, you mentioned on U.S.? in water of the 'XX? regional you're parts think of other some a in international Can FY just give growth

Bert. I level, if to that get will don't know it

Claudia despite our that be headwinds macro it, done think these I has faced business, European And I will think mentioned it it robust. well.

Zealand, sectors in And Southeast so energy transition in all East. Australia and is remained those strong. water And transportation, of across driving I think in the have that's Middle Asia energy U.S., New around and P&PS East sectors pronounced Europe. -- probably more Middle transition the our then

Our APAC significant at digits. business in year this double grew

And the a of smaller the so base rest in world.

geographic the really all, is diversity in all we us. in business have helps say I'd our strong So that really, and

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

on the basis to element the just I point bridge. XXX wanted mix follow margin of up

is were achieving in to the better before Bob, related having half much when versus that think, about the just you mix, of like I that's how in talking there margin CMS not I'm better? your guess I be done that P&PS? optimization, other will is in come all with cost will Or when initiatives wondering margins and said margins your some segment-level of out time? over lower

Yes.

make me Steven, just let understand. So I sure

and what I'll said, address then Bob So segment I'll the margins. recap

mix. going mean, mix, And what the XX.X%, to is just just the is one remains roughly up I by with us. first half the So

optimization, of the is function digital half really addition the cost costs And operating and all also the and of that of removing the model. the other a businesses streamlining remaining enablement that. is The our

are stay the or to So that margins. answer your remain that that their question? the Does us segment words us is going individual other with increase with in businesses

Yes, it does.

efficiency the as level optimization, as So segment level to the that's just corporate Yes, of part initiatives helpful. of cost is there sort element. opposed

as it what company. that's separation a where model, Post the shows, operating overall that's Yes.

XXXX? net be calling $X to about cash about now. trying exiting from down you know Okay. like in debt debt back from think is. out but if coming debt. I looks you're before billion that billion are your to it sure how close net about Great. XX or $X.X flow separation if of sort pay dividend restructuring And I'm assuming now, would the cash just billion But of not out. whatever Free $X this to cash position months you much another a of missed not, framed I don't position expenses

Yes.

So all guided our principles. are by few decisions a

maintain The we for important investment-grade is first want. that maintaining strategic to the us Very flexibility an rating. one

other commitment by the especially one is shareholders. our are cash decisions transaction. our with rating this those conversations agencies, So return to to with And the our guided

the the our returned is we to elements principle to an one year, that I best distribution I decisions for quarter the of guiding important reasons that's the as So this our of basis for us so and to one the much of highlighted this think go transaction, is we and -- make shareholders, is also element on risk-adjusted shareholders. a

an I in And element equation. important so the that's think

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

characterize jobs, could characterize just higher. of the been what if the backlog those? profits would booking was in the to seem any the these -- the to how projects price? given some you margins be you fixed profile allows Just Are of higher? mix you've risk be of more I price mostly fixed the wondering there Is

the technical about question business scientific a business. Yes. that at part level mean is we're I we're within No, playing it's highest the clients' where and our Gautam, a because the offering talking of of great it's client of business.

a because in commercial clients' just fixed-price fixed trade impact in commercial than types from them technical that and whether We're get those it outcome-based I'm is in a be of level in or able actually margins so margin offering X get on model PA in X. Part advanced We're services we'll garners either scenario the a business. right? enablement, model, that infrastructure pure-play productivity a the to we're Consulting and our them offering scenario And our historical, in or digital of higher gain. with level space, around our work the a reimbursable or to Part solutions going that's get get facility reimbursable of having the science-based we'll -- rather

one quick follow-up. just And Okay.

talked yet? curious booking it guys PFAS-related do when had if just some And commercial not, work? of that traction any about You if was technology. have your PFAS anticipate I you

PFAS we in they PFAS PFAS larger as arrangements state making wins the end some local around referencing play. Where around the world, actually well haven't. have We're to that type clients, market, we're consultancy too. I'm comes or framework whether water that, has. agreements gain as the it it that federal, that is for be These into in Yes, center. of the water as our of work, we an It out has seeing segregate

The in real sake comes application of you PFAS highlighted for industry type dockets. public get when on PFAS being fund of super containments type the across these

a bigger. So that even XX%, probably And it related we're XX% you of you are then items affects -- when those growth, get further I see our sectors gets end perspective market in range XX%, start driving at but get how that kind compliance sectors. would to it from end look market some the growth of we and

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

get I guess want on I term just the to medium a bit directionally. it's if perspective even of little maybe just

is cost maybe there market fiscal within at and for 'XX, just As maybe and few geographically? of level end XX.X% see we where a about thinking in margins think Or optimization you just on expand businesses? opportunity look that years? that, to mix by P&PS going you the I'm margin get sort whether just region. the the kind think you maybe of lower levers moving beyond forward look in for to If about just P&PS your from to

ahead. go You

Yes.

do is this do all we're say I'd that we -- currently, So something the doing we time. and

big have So first I it's if the the of platform best, is years. platforms, important, That's not -- and delivery best the very would are one we X several one. been levers the and say for our one, global

digital today digital see enablement. the differentiation based we to -- highlighted drives a competitors, projects we those enablement where before, outcome we the is are projects. Bob compared you have that one mentioned other The And you that profitable some the more clear that see at the of our and

really just about to in X -- we need. kind Yes. Claudia on more the a Sabahat, end which of enablers. portfolio I'll enablement markets thing, that And in add don't as the don't well. the talked we're our We that strong. -- strongly feel is biggest is our one add third, what consultancy our we

we with not and that. on enablement, market really It's be that we talent, buy end digital geographies But new the in how access to we're for best sector. an the or consultancy-based agreements skill go like in search which sets global one through I'll deliver coupled in expansion it's need -- of to high the

over mix beyond kind to guidance that look for the years, mix kind the Great. next year, X-year how should funding price you laid you even the couple sort in kind Okay. as anticipate of And think do year your And next versus plan, particularly that, as in in about we the for think about of then volume some X% your you X% P&PS. the you infra out what system of the now? another And right out given of maybe that's of of embedded space? numbers of

Yes.

enablement different tied facility for that I to a -- hone probably It's different infrastructure. to advanced different just answer on in kind in space, not in is component. this of a honed -- that this think that's going infrastructure because let's components it's but be of

the spend for Our are clients they can infrastructure much with needs. capped how

with the So what gaining with an outcomes-based we of where enablement we're offering come we margin is do in solutions.

higher So we're with that what there's a our price is -- margin digital driving a enablement. with component but

do that the see as simplified more talked a and line streamlined is creating that we all bottom Claudia driving organization. we about to the things So

the from line of Andy comes Baird. question final Your Wittmann with

on there's million just guess would associated like to I the actions. those it those transaction, of here items some It translate all of on can with ahead cash but helpful statement? the the talk be you kind after just transaction. probably income and $XXX some Claudia, of be about to costs going sounds recognition timing timing of understand to the of the the these

separation. So the very to execution closely is the linked Andy, of this

advisory will -- because the see we that elimination before. all of be stranded and fees advisers costs mentioned I very much more have of there and talked So that, of going towards throughout the more you're it you the the if and but about will all because end, to

line the time So the that's with of aligned just separation.

It the I were called those corporate guess seasonality, confirm out about more separation, the that that. the guess that why quarter? to be it's first I be next. different run little in you're higher to to weren't -- about talk don't XQ. just wanted rate get Then XQ. that restructuring to What's I always present like cost costs in you the seasonality? and is that I Is are just related being to are there with saying you're a bit excluded And footnote in tough the guess, guide, on going guess that aren't related I going XQ if the year's I same. there's in do to the I saying unallocated this to year's guess fact seasonality items sounds want I I when want last excluded? don't about comfortable that. comp maybe that then think that, And Okay. just a it

we I -- think talked the a about business. of seasonality No, there is well,

separation say I'd ones that the just then high to I cost the to one. yes that So the a mentioned of And million, of level, the that at support $XX CMS. yes, carrying we're

or it's to linked the transaction to So really new the CMS preparing environment. the in operate

didn't I and throughout that CMS in would we support -- carry So the -- it or more extra But $XX Cyber one million say say those, & what I CMS Intelligence. the impact. would higher is across amplifies be the on company to

At this turn the over time, And to there call I are now more questions. the would no like back to team.

updates look forward. providing future, Yes. exciting Thank our everyone. Thank we we the We're you, forward to progress excited as about everyone. plan more and you,

Thank you.

Thank you today's for that call. concludes gentlemen, and all joining. Ladies

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