Jacobs Solutions Inc. J shares are trading lower after the company reported mixed fourth-quarter results.

The company reported fourth-quarter revenue growth of 4.4% year-over-year to $2.96 billion, beating the consensus of $2.368 billion. Adjusted revenue rose 4.3% YoY to $2.118 billion.

Adjusted EPS was $1.37, up from $1.07 a year ago, below the consensus of $1.54.

Gross margin was flat at 24.8% YoY and rose 4.2% to $735.21 million. Operating margin expanded 70 bps to 6.6% YoY, and operating profit rose 16.5% to $195.21 million.

Jacobs Recorded $187 million in mark-to-market gains on investment in AMTM, increasing GAAP net income.

The quarterly backlog reached $21.8 billion, marking a 22.5% year-over-year increase. The Q4 book-to-bill ratio was 1.67x (1.35x on a trailing twelve-month basis).

Operating cash flow for the quarter totaled $196.53 million, down from $219.36 million a year ago.

“Our GAAP net income margin and adjusted EBITDA margin showed strong sequential growth in Q4, and we plan to build on this strong performance in FY25. Furthermore, our balance sheet remains in excellent condition following the separation transaction. This financial strength positions us well to continue investing in organic growth while repurchasing shares and growing our dividend over the long-term,” commented CFO Venk Nathamuni.

Jacobs’ Chair and CEO Bob Pragada highlighted the company’s progress in its strategic shift toward a streamlined, higher-value portfolio, marked by the completion of the separation transaction for its Critical Mission Solutions and Cyber & Intelligence businesses. He noted strong demand in key end markets and continued momentum driving higher gross profit.

Looking ahead to FY25, Pragada expressed confidence in positive trends across Water and Environmental, Critical Infrastructure, and Life Sciences and Advanced Manufacturing, supported by a simplified structure, global delivery model, and operational efficiencies.

2025 Outlook: Jacobs Solutions projects Adjusted EPS in the range of $5.80 to $6.20. Adjusted net revenue is expected to grow at a mid-to-high single-digit rate.

The company anticipates an Adjusted EBITDA margin of 13.8% to 14.0% and forecasts reported free cash flow (FCF) conversion to exceed 100% of net income.

Price Action: J shares are trading lower by 1.83% at $137.79 at the last check Tuesday.