Jacobs Solutions' Robust Cash Flow In-Line With Expectations, Issues Annual Guidance Under Two FX Scenarios

Jacobs Solutions Inc J has reported Q4 sales of $3.9 billion, up 8.2% Y/Y, beating the consensus of $3.82 billion. Net revenue is up 11% in constant currency.
Adjusted EPS reached $1.80, up 14% Y/Y and 18% in constant currency, beating the consensus of $1.77.
Adjusted EBITDA of $350 million, up 13% Y/Y and up 17% in constant currency
Cash flow from operations of $278 million and free cash flow of $230 million, driven by strong DSO performance
Backlog increased $1.2 billion to $27.9 billion, up 5% year-over-year and 8% in constant currency.
Revenues by segments: Critical Mission Solutions $1.39 billion (+9.78% Y/Y), People & Places Solutions $2.24 billion (+9.27% Y/Y), and PA Consulting $254.35 million (-6.93%).
The adjusted operating profit margin was 10.7% compared to 9.9% a year ago.
Guidance: Jacobs has provided an outlook under two FX scenarios:
- Based on fiscal 2022 average FX rates, the company's FY23 adjusted EBITDA is $1.465-$1.545 billion with adjusted EPS of $7.60-$7.90 (consensus of $7.66).
- Based on FX rates in early November, the company's FY23 adjusted EBITDA is $1.4-$1.48 billion, and adjusted EPS of $7.20 to $7.50.
The difference between these two scenarios is approximately $430 million on a net revenue basis.
Price Action: J shares closed higher by 1.43% at $126.04 on Friday.

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