Jacobs Solutions Inc. (NYSE:J) Q1 2023 Earnings Call Transcript

Unidentified Analyst: This is Brandon on for Chad. Follow-up on CMS margins. You said that ending the year above 8% to give the full year to 8%. But given the high margin projects you all have been talking about, is it safe to assume that we can expect that exit rate to be the prevailing rate going forward and could the margins potentially approach People & Places levels given all these projects?

Kevin Berryman: That would certainly be consistent with our strategy. I would say the margin burn that I was referring to is second half oriented primarily. So as we look to beyond 2023, certainly consistent with our strategy, we are always looking for an incremental profit improvement in terms of margin. So yes, that would be consistent with our execution strategy.

Operator: The next question is from Alex Dwyer with KeyBanc Capital Markets.

Alex Dwyer: This is Alex on for Sean this morning. So my question, the backlog was very strong this quarter and it looks like all segments grew sequentially from 4Q. You guys had highlighted this gross margin in the backlog was up 100 basis points. Can you guys talk a little bit about what’s driving this 100 basis point increase in margin? Is it one or two segments or is it more broad based in all the segments?

Bob Pragada: I’d say it’s broad based. This is — again, when we keep reiterating, moving up the value chain with our clients, these are higher higher level technically complex as well as digitally enabled offerings that we have now in the marketplace, which is driving that higher margin in our backlog. And so it’s not acutely focused in a specific one area, it’s across the board.

Operator: We have no further questions at this time. I’ll turn it over to the presenters for any closing remarks.

Bob Pragada: All right. Thank you, operator. And thank you, everyone, for joining our earnings call. Looking forward to future calls and providing further updates on upcoming events and on our further calls. So thank you very much, and have a great week.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.