J · Jacobs Solutions Inc.

Revenue for Q2 FY2026 rose 27.0% to $3.7 billion from $2.9 billion in the prior year quarter, primarily driven by growth in the Company's I&AF business and year-over-year increases in PA Consulting, particularly its public services through defence and security sectors. This expansion reflects strategic execution in core operations amid the integration of recent acquisitions.

Gross profit increased 7.7% to $794.9 million, yielding a 21.5% margin compared to the prior period. The Company's increase in gross profit was mainly attributable to higher revenues, with overall margin impacts from year-over-year project mix changes, elevated revenues associated with pass-through costs, and lower utilization trends primarily in the PA Consulting business. These dynamics highlight the challenges of scaling service-intensive operations while managing cost structures during growth phases.

Operating income shifted to a loss of $81.2 million from prior year profit of $208.6 million, representing a -2.2% operating margin. This decline was driven primarily by the revenue growth noted above, with margin impacts from higher pass-through costs partially offset by increases in selling, general, and administrative expenses. The pressures underscore the costs of business expansion and integration efforts.

Net income resulted in a $45.9 million loss, or diluted EPS of -$0.34, compared to $5.6 million profit and $0.06 EPS last year. These results stem from the operating loss and related factors, emphasizing the quarter's focus on transformative growth over immediate profitability.

Cash flow from operating activities was negative $103.4 million, compared to $11.0 million provided last year, leading to free cash flow of -$140.0 million after $36.6 million in capital expenditures, up from $27.6 million. These outflows align with the timing of growth investments and operational scaling.