Jacobs Solutions Inc. (J) Earnings Call Transcript & Summary

If everyone could go ahead and try to get their seats. Because safety is important in everything we do at Jacobs, we're going to have a quick safety briefing from the hotel, and then we'll start the presentation. So [ Julius ] from Faena is going to come up here to say a few words.

Good afternoon, everyone. My name is [ Julius ], I'm the Assistant Director of Security here at the hotel. I'll be very brief. As for everyone staying in the hotel, we have 2 stairwells, one located on the north side of the building, which is stairwell 1 and the other one on the south side of the building. The north side leads you out to the front of the hotel. The south side leads you out to the side of the building. As for an emergency meet-up spot in case there is any emergency, we all meet out on the beach. PD takes approximately about 5 to 7 minutes as for arrival time, along with the fire department and the ambulance as well. If you need any assistance from my team, please feel free to talk to security or the front desk, and we'll gladly come up to assist. Nothing more from myself. Thank you all for having me briefly.

Do you want to quickly -- just for tomorrow, if anyone's here.

Yes. Along with that, for those staying in the hotel, I'd highly recommend for you, if you are -- if you have an early flight or late flight, depart before 10 a.m. Collins will be blocked off by the police due to an event we're having across the street, along with Indian Creek. So if you are planning to leave anywhere between 9 to 7, it's going to be pretty hectic around that time. So I'd recommend, schedule your flights a little earlier than that. Thank you.

All right. Well, thanks, everyone, for joining us in-person in Miami and over the webcast. I'm Bert Subin, Senior Vice President of Investor Relations at Jacobs, and I'm happy to welcome you to our '25 Investor Day, which is our first Investor Day in person in 6 years. We have a great lineup for you all today. This will give you the brief agenda. Our Chair and CEO, Bob Pragada, will lay out our company vision and strategy for the next 4 years. And then our senior leaders will dive deeper into how we differentiate our end markets and what our outlook is. After our CFO, Venk Nathamuni, goes through our forecast, we will have 30 minutes allotted for Q&A. So we ask, any questions you may have, you just hold them to after the presentation. We'll have about an hour of prepared remarks, and then we'll have a 15-minute break followed by approximately 45 minutes of prepared remarks and then the Q&A session. We think we've got a great presentation for you, so we hope you'll enjoy it. The moment you've all been waiting for. On Slide 3, we've got the forward-looking statement disclaimer. I want to quickly point you to information about our forward-looking statements, non-GAAP financial measures and operating metrics. Before we dive into the presentation, we've got a brief video we want to show you, and then Bob will come up and start everything. Thank you, everyone, for being here. [Presentation]

All right. Definitely inspiring. Well, welcome, everybody. Welcome to our 2025 Investor Day. Great to see some familiar faces and some new faces as well. But before I dive in, maybe a couple of comments about the venue. Might not be your typical Investor Day venue. And so I just wanted to make a couple of comments. Our communications team and our IR team did a great job in finding the only hotel that was available in the metropolitan Miami area. So kudos to them. I do think, though, they went maybe a little bit too far on this kind of Moulin Rouge format. But they knew that I was raised in Chicago, and so they went along with that vibe. The second comment is if you look up at the balcony there, you'll see a lot of bulls. That's not for the Chicago Bull, but it really is indicative of the presentation you're going to see. That was by design. No, it wasn't by design. But we do have a very bullish presentation. And during the course of the presentation, you're going to see what we mean. We're really excited about the future. Really excited about the future, but we're also very proud of what we've achieved over the course of the last 78 years. And during the course of the presentation, we're going to highlight the basis of that excitement. And we're -- I'm joined by our executive team in order to give that presentation. Now just a few words on our executive team. I think collectively on our executive team today, we have over 100 years of Jacobs experience. They might be new faces to you, but they've definitely been at Jacobs for quite a while and have been delivering superior value over the course of their career. And you're going to hear directly from all of them. By the way, that 100 years is not weighted towards a single individual. It's pretty balanced, if you take a look at it. So really, really excited about the presentation today. The other is we've got leaders from across our business representing the markets. And so during the Q&A -- I'm sorry, during the break and after the Q&A, during the reception, you have an opportunity to speak to all of them. I always get asked, you do so much in so many different markets, how would you synthesize what Jacobs does in a single statement? And it's not an easy task. But the way we synthesize it is we are a leading science-based consultancy and advisory company delivering resilient, digitally enabled solutions for our clients globally. A lot of words, but over the course of the next couple of hours, we're going to go through what exactly that means in a meaningful way. The other is that there are going to be 5 common themes that you're going to hear through everybody's presentation. First, we are a simpler and more focused company. We made some big moves. We made a big move here recently, and a lot of you have been along with us for that journey. But we are myopically focused on the end markets we're in. And the second point on position. The positioning that we have in those end markets, we're already an industry leader, and we got a great opportunity to expand that leadership position over the course of the next 5 years and beyond. These are end markets -- number three, these are end markets where there is some significant macro tailwinds and secular growth trends that are happening in every single one of these end markets, and we're going to describe that. These are global in nature, and they're enduring. Fourth, we're excited about all our end markets. But what we're going to dig into even deeper is we are seeing outpaced demand right now in water and in life sciences, and we'll talk more about that. But it's something that we haven't seen in our decades-long experience in both of those markets. And then the last, this is an organic execution model. Organic execution with financial discipline. So before going into the future, maybe a quick step on the past. I think some of you in the room remember fiscal year '16. And in fiscal year '16, we were kind of on the start of that transformational progress. It was the first time ever in the history that we were just talking about the '16 Investor Day. It was the first time that we actually ever had an Investor Day, and we had a strategy. And that strategy was really around focus and fix what we had in our business. End of the year, we came in at about $600 million of EBITDA with an EBITDA margin of 7.7%. Over the course of 3 very focused strategies and investment in some growth areas and growth markets, coupled with -- think about this, we divested or spun off 80% of our revenue in that period of time, invested in growth, and doubled our EBITDA margin during that time line as well as doubled our EBITDA, almost doubled our EBITDA. And so today, we're sitting in a place where we are poised for continued growth. And if we look out the next 5 years, we are positioned to double our EBITDA again as well as add 300 basis points of margin to our EBITDA. We do that through what we call redefining the asset life cycle, and we're going to get into some detail on that here in a moment. So who are we today? See all the items on the left, focused business model, science-based, end-to-end solutions, scalable solutions that are delivered globally and digitally as well as strong organic execution. But from an end market standpoint, where we are today is critical infrastructure, as far as our end markets, and this is going to -- we're going to go into some detail here in a moment, water and environmental, life sciences and advanced manufacturing and our investment and our partnership with PA Consulting. We have the CEO and the Head of Consulting for PA here today. But this partnership has really unlocked a lot of value, and we see that value moving forward. Shannon Miller is going to talk in detail about what we're doing with PA and kind of describe that model, and I'm going to highlight it here shortly. So what does the future look like? And what do we mean by redefining the asset life cycle? Before going into some -- how project life cycles and projects and assets are delivered for our clients, maybe a couple of background points to highlight. First, that science-based innovation really makes it differentiated for us to go in and figure out what's going on in the science of our clients' business. Dr. Jacobs had a saying that we're in the business of making our clients' business a better business. How do you do that? You got to understand the science of your clients' business. Second, the end-to-end solution. In order to contribute and to add value for our client across that asset life cycle, you have to have an end-to-end solution. And we're going to demonstrate today how we have that end-to-end solution across the end markets that we serve. And then lastly, our global delivery as well as our digital augmentation, and you're going to see a lot of that today as well. That global delivery is important. It is not about low-cost centers or offshore engineering. This is really optimizing our global talent to deliver locally, and we've got some demonstrated proofs on how we do that, not just as an exception, but as the norm in our business. So our strategy moving forward, if we're going to change the world, we're going to take that challenge and accept it. So challenge accepted. Before diving into a little bit more about the asset life cycle, we thought it was appropriate to maybe step back from Jacobs and talk about what's going on in the broader industry and what's [ going ] on over the last 10 years in order to put a little context around what we're seeing with our infrastructure peers. And so it is a little bit of an unconventional move to talk about our competitors when it's an Investor Day about Jacobs. But we really wanted to do it in order to provide some context. Look, the industry over the last 10 years has seen financial fundamentals improve over that period of time. Lower risk profile in a lot of our competitors' business as well as ours, higher profitability and higher cash flows as well as doing this while lowering net leverage. We believe for Jacobs, we're ideally positioned to lead in not just these financial metrics, but even more. So a little bit about the asset life cycle, and let's go back for a moment. Yes, the financial metrics have improved over time. But we do find ourselves in a space where our clients continue to buy as well as deliver their own capital for assets in a very project-centric type of mode. And what I mean by that is it's linear and very much in series. But the capital decision has already been made, and they're going through a set of boxing players into each of the phases of that project life cycle. And sometimes, this leads to less efficient use of capital. The only way to drive down capital use is to reduce scope. And we see that this has led to some really inferior outcomes for our clients over that same period of time. Here's what we're advocating. And before going into the specifics as far as the end-to-end solution, maybe one thing just to clarify. This whole kind of stacked speed to market in parallel activities happening around the project life cycle and therefore, the asset life cycle, that's not new. That's been -- we've been doing that for several years, even our competitors have been doing it for several years. What is new is this. We are getting involved at a much, much earlier phase of the asset life cycle in having a part, now with PA Consulting, in the client's decision to deploy capital to drive some form of business transformation. And that's what PA does, and that's what -- in partnership with us. We've been able -- with us knowing the science of our clients' business. PA does as well. We've been doing more and more business advisory as the starting point to what then turns into conceptualization of the project, the build cycle during the project as well as, especially in the water assets, our long-term involvement with the asset, water treatment plant, a wastewater treatment plant, in operations and maintenance. Patrick is going to go through this. But 250 plants around the country in the U.S., we are the operator and maintainer of those plants. It gives us great data, great insights to these plants. But then you can draw this -- you draw this -- I think Patrick is going to talk about it, you can actually draw this in a circle, leads back into our science-based solutions for our clients. We're doing this along the way through our digital platforms. These are AI-enabled platforms that we've either developed ourselves or in partnership with Palantir, and Shannon is going to talk in much more detail at this is along the way, driving efficiencies with these digital platforms, not only for ourselves but for our clients. Think about it, we've been in this business for 75 years. We've got loads of data, data from around the world with standards and processes that nobody else has. And we're putting our own effort around the large language models in our databases in order to develop these platforms to drive capital efficiencies for our clients. We're doing that in a very programmatic way. And we believe that, that program management approach, I mean, not as a vertical, but as a capability, is really a differentiated position that we have in the marketplace. So just to summarize, science-based leads us to be able to address our clients' challenges in real time. That global delivery model with digital platforms is feeding into our ability to deliver superior client outcomes, and that is all leading to better capital decisions for our clients. Now maybe just a little bit about the end markets, and we're going to go into all kinds of detail here. But if you look at our end markets, and Venk is going to highlight the source of our conviction right now and especially with our backlog growth that we've seen just over the course of the last few quarters. But right now, the tailwinds that we're experiencing in these markets is generational. $700 billion of serviceable, addressable market for Jacobs is happening in real time today. So what's driving this? You've heard a lot of these things before, but if you just kind of go from my right to left. In the water sector, it's everything from water scarcity to too much water, treatment methodologies and science-based treatment methodologies that we're able to innovate in as well as a change in the regulatory environment as well. It's all driving that market, and we're on the forefront of it. Think about it, the market grows kind of at a 3% to 5% range. We're talking about doubling that over the course of the next 5 years. Advanced facilities. You've heard a lot about this, whether it be new drug therapies, everything that's going on around GLP-1s as well as oncology and now neurodiversity and neurodegenerative type of diseases. That's driving that market. And Koti is going to walk through the complexity that's in these facilities that's driving our leading position in that space and then everything in the world of AI data centers. You can't even have a conversation these days -- everything that's happening in the digital world is now translating into the physical world, and we're seeing it in real time. And then the ubiquitous world of critical infrastructure, which we define it as energy and power, transportation and cities and places. Continuous power at scale, sustainable transportation, gigacities and complexes that are coming up, not just in the Middle East, but around the world, we're in the middle of all of that. So the markets are definitely -- back to the macro tailwinds as well as the secular growth trends, are positioned extremely well for what we do at Jacobs. We always have been and we always will be a company that's rooted in its culture. And we call that culture the culture of caring. And the 3 main pillars around that culture is, first, client centricity. We're turning our clients' ideas into reality, and we do that every single day. Second, our people. Our people are in the core of our business. We are dedicated to inclusion and belonging, to bring our authentic self and our best self to work every single day. We've been on this journey for a long time. We're going to continue on that journey moving forward. It's leading to our -- we've got great attrition rates right now. I probably shouldn't refer to attrition as great, but low attrition rates right now as well as it serves as one of our biggest recruiting themes today as well. And then lastly, everything we do has got safety and sustainability at the forefront of what we do. So with that, we're driving our end-to-end solutions to drive client value through our culture and our talent. So to summarize, you see the end markets right now, we are in the middle of -- I'd say, early stages. I was going to use a baseball reference, but early stages of redefining that asset life cycle. It's taking hold. You're going to see proofs in these themes that I talked about come through in my colleague's presentations. And really looking forward to hearing from all of you as well during the Q&A. And with that, I'll introduce Patrick Hill. Patrick runs our global operations. And I'll let Patrick talk about his background as well. So Patrick, over to you.

Thanks, Bob. Thanks, Bob, and great job. Great to be with you here today. As Bob said, my name is Patrick Hill. I've been with Jacobs for almost 27 years. Started my career in the water industry and since then have led large parts of our global operations and across all of our sectors. I've got the great privilege now to be leading our 45,000 people, delivering over 25,000 projects every day that we do here at Jacobs. I'm just going to spend a little bit of time introducing our core business with some upfront remarks and scene setting and then go a little bit deeper into our water and environmental market and then also our critical infrastructure market before I hand over to Koti Vadlamudi, who will do the same in life sciences and advanced manufacturing. So first of all, a bit of scene setting. And so Jacobs has really had a market-leading position in all the end markets that we operate in and really goes to the success of delivering that enhanced shareholder value that Bob mentioned before. Whether you look backward or whether you look forward, we're entering this strategic cycle with a lot of positivity in terms of the growth of the core business. If you look backward, double-digit backlog growth in a really strong position of back-to-back quarters there. Looking forward, very strong pipeline, as you can see, really robust across all of our markets. Some of the core themes that we will touch on throughout the presentation will be a little bit about our really unique market position. Bob mentioned that we'll go a little bit deeper into life sciences and water. We believe that we have an unparalleled position in both of those markets. In critical infrastructure, that market is underpinned by a global energy transition that's happening at the moment, but also a very strong outlook in the U.S. infrastructure market. One of the themes Bob touched on as well is just the convergence we see across all of our end markets. Whether it's power skills, whether it's environmental skills, whether it's building skills, that capability is relevant to all the markets that we operate in. And then finally, our operating model is one that's strongly globally connected. It's where we deliver world-leading skills to wherever our relationship clients need them and having that core strength in our global delivery locations. There's been some recent questions over the last weeks and months, a little bit about the composition of our portfolio. So I thought we'd take a little bit of time just to better understand the makeup of Jacobs right at the moment for the current context. And so this just gives you a bit of a snapshot of the diversified nature of the business, providing what we believe is very healthy and diversified, robust portfolio. On the left-hand side, you can see the balance that exists there, the diversification that's there with our North American private clients, our North American state and local clients and then our international non-North American business, including both government and private clients, roughly balanced right across the globe. You can see at the top of this chart that around about 9% of our business is relevant to the U.S. federal market. And of that, about 70% or 80% is related to the Department of Defense infrastructure, which we see as having still a very robust outlook. And so overall, very diversified, very healthy business. Probably the other thing of note is that the margins that we enjoy across the globe are quite uniform in the way that we operate. Shifting to the right-hand side of the screen, just giving you a sense of the U.S. infrastructure market. If you wind the clock back, the Infrastructure Investment and Jobs Act was signed back in November of '21. Since that time, about 1/3 of the funds have been spent. So we still see a lot of funding to be spent through IIJA. We see a longer tail coming through that funding mechanism. And perhaps the robustness of that and the sense of confidence we get from that is that we've got a fully funded Highway Trust Fund for the next 2 years. Now just moving into our core markets. And I'm going to start with water and environmental and some of the larger strategic takeaway themes here just around the climate extremes that exist and the increased regulation that's really driving significant investment in the water sector right across the globe. And perhaps the other unique element of this is just Jacobs market position with world-leading technologists and that end-to-end capability that Bob spoke about that we think is a real differential to growth in this sector. So we absolutely have a world-leading position in the water market. Over the past decade, the combination of Jacobs and CH2M has really set us on this path and set us apart from our peer group, really partnering with our clients to deliver highly unique end-to-end solutions, whether it be in advisory, design, delivery, operations and now into the digital and asset management capability. And so this is really driven by our globally connected, high-end subject matter experts that deliver this for the water system, whether it's the huge mathematical models around rainfall and runoff and the proprietary digital products that we use to predict flows all the way through to the microbiology of understanding how water is purified. Our knowledge and our capability is science-led and is a very strong theme that runs through our business. The other element of that is that we have a system-wide approach, what we call a OneWater approach, which takes a holistic view of the market, and I'll touch on this shortly. But Bob mentioned that we operate over 250 assets right across the globe, really providing us real-life practical examples and insight and data that we then feed into our advisory and design services to provide unique outcomes and solutions for our clients. On the right-hand side here, we've got the environmental market. And perhaps just a few comments there. We have a leading position in this market. We're ranked in the big 4 by the Environmental Analyst (sic) [ Environment Analyst ] journal. And a couple of the highlights here we'd suggest is just that it's -- we see our environmental skills being relevant to every sector that we operate in. It provides a strong vertical of its own but also is relevant to every project that we deliver, regardless of the sector. And probably in a really practical and pragmatic way, we see environmental services being a great front-end service where in the concept phase with our clients, in the environmental permitting phase, when we're unlocking the potential of projects, being engaged in those early phases really does help us differentiate and deliver high-volume downstream services in the design and delivery phase. Just wanted to spend a little bit of time on the water cycle and the various layers that exist. I'll just cover this in a little bit of depth. There are layers of opportunities right across the cycle here. You can see here a simplified image. And maybe even start with the natural environment. You think about the clever solutions that are required with the water resources, whether it's in the upper catchment, all the way through to the receiving waterway. Key opportunities exist to solve challenging issues in the natural environment. But these clever solutions actually translate into the built environment as well. If you think about the storage, the conveyance, the treatment and the recycling of water being a very precious resource, a highly regulated resource, maybe one that we take for granted quite often. But it is really critical to have that deep understanding of this from -- once again, from a scientific perspective to really characterize the flows, to understand the predicted flows and then to size and design the capacity of those built assets. A huge breadth of demand for this right across the board. And so then just connecting that water cycle to the project life cycle. I mentioned before about the advisory, the concept phase, the design phase, construction, operations, as we mentioned, and then wrapping that in now what's really -- a really strong digital theme that's running through this industry. As a young process engineer starting their career in this sector, I understand how much volume of data gets collected. And I would say for decades, it's never been used. Now with the digital products that we have at our disposal, it's a great opportunity to drive efficiency in this industry, to drive regulatory compliance, to improve customer service and satisfaction and ultimately reduce costs through reduced power and chemical demand. Perhaps bringing this to life with some real-life examples and maybe give you a sense of the depth and breadth of our involvement in this industry. I'll start in the top left here. The new Kranji water treatment plant is a project that we've kicked off in the last 6 months or so. This comes off the back of a 30-year dedicated relationship that we have with the Public Utilities Board in Singapore, Singapore's national water agency. And so together with PUB, Jacobs has delivered first-of-kind and marquee projects throughout that period of time, if you -- even in the last 12 months. Together, we were recently awarded the Wastewater Treatment Plant of the Year at the Global Water Summit for the Changi Water Reclamation Plant. But really, with Singapore, given that is an issue of national security, they are really a world leader in terms of advanced water treatment and using treatment techniques that treat water and purify water to such high levels that it can be used to drinking standard and hence, secure supply for the nation. That world leading expertise is really setting a global benchmark. And we see that expertise being deployed everywhere around the world. On the right-hand side, we've got Alkimos desalination plant, once again, another project that's just recently kicked off. If you wind the clock back in Australia, about 20 years ago, there was a very long millennium drought. And as a result, every major capital city in Australia deployed at least 1 seawater desalination plant. Jacobs has proudly been involved in a deep way in 3 of the 5 metropolitan areas that delivered those seawater desals. And most recently, we're the premier designer here on Alkimos. It's interesting with Alkimos. It's interesting, with Alkimos -- just going back to what I mentioned before about the early phase work. This is a project where Jacobs was engaged several years ago to look at things like environmental approvals, environmental impacts, how to connect into the water grid, how to manage the planning permit process. And so once again, you can see that, that position that we had has really fed into a lot of downstream work. I might just touch on the bottom 2 quickly. The bottom left there is the DC Tillman water treatment plant. Once again, it's an advanced water treatment project, which will treat water to drinkable standards and really reinforce the catchment in LA. So there's less reliance on the upper catchment in California. And so that will be a pioneering project that will be highly relevant for water-stressed states and jurisdictions right across the globe. And on the bottom right, United Utilities, it's a long-standing relationship we've had with UU. If we look forward over the next 10 years, we've got AMP8 and AMP9 with UU. We're embedded there as the strategic partner, the construction delivery partner and also the digital partner, which Shannon will talk a little bit more about shortly. So just to summarize, we do see very strong demand in the water and environmental market. It's one that's underpinned by some really large themes, particularly around greater regulation, around population growth and around climate impacts. And as I mentioned, those climate impacts drive extremes like we see in California or Singapore or Australia with too little water. And equally, where there's too much water, we see things like sewer overflows where there's going to be greater regulation in the next decade in the U.K. and very large conveyance projects like what we've seen with Thames Tideway Tunnel, which we're just finishing at the moment. And even last week, we just switched on the Central Interceptor sewer tunnel in Auckland. So we'll see more and more of those large conveyance projects to reduce the impacts of weather flows. Just looking at the environmental market. Just to sum up in terms of the outlook, we would say that demand will be very steady there. Yes, there will be some regulatory change in different jurisdictions around the world. But given the global diversification of our market there, we really don't see very significant impact from that. And equally, we see the private sector playing its role here, really living up to its longer-term obligations regardless of what the regulatory environment might be. And so I think I've covered the key topics here. But just to perhaps reinforce the strength of this segment, we really do see climate change and regulation driving a significant uptick in the water sector. We see the water growth outlook as being something that's very consistent right across the globe, and it will attract significant investment driven by some of these themes. And on the environmental side, that capability is something that we'll see feed through in all the sectors that we operate in really unlocking opportunities in all of those projects. So I just wanted to move now to critical infrastructure, maybe touch on that for a few moments. We are a top-tier player -- top 3 player in each of the major verticals in this market, but also, as Bob mentioned, have great, deep experience in terms of complex project delivery. And so we do see the criticality of these markets, in particular, enjoying long-term, resilient investment both from governments and the private sector regardless of the economic cycle, as we've seen for decades previously. Just a reminder, with critical infrastructure, we talk about 3 main verticals here. We've got the energy and power vertical, transportation and cities and places, with transportation being the largest of those 3 verticals and energy and power probably being the one that's growing the fastest. Probably -- as you think about these 3 markets, probably the things that really drive investment here are around population growth, the need to bust congestion in major cities and metropolitan areas and in general, just improve the quality of life of those metro areas. What sets us apart in critical infrastructure really around those client -- long-term client relationships, those long-standing relationships. We have a relationship-based approach, whether that's in the federal area, the state and local area or as I mentioned, with private clients as well. It's one that's fully connected, fully supported by our global delivery approach with our technically connected communities of practice globally, as I said, where we deliver world-leading skills wherever our clients might need them, but also our core global delivery centers in key locations being a key differentiation in terms of delivering both expertise and capacity. Just to touch on program management, and Shannon will spend a little bit more time shortly just talking about how critical it is as a key differentiator. This is something that we see as being a key element, a key differentiator in terms of the way that we support our clients, deliver what are now some of the world's most complex programs in terms of the scale and capacity that's involved. $10 billion-plus program now is becoming more and more common. And so having Jacobs sitting on the same side of the table, supporting our clients, helping them manage the supply chain, that is something that's very critical to their success. Just to spend a moment on the energy and power vertical and just thinking about the significance of the global energy transition. It remains one of the biggest opportunities that we see going forward in critical infrastructure. We've actually had this energy and power capability for decades in Jacobs. But in the last 18 months, we brought it together as a cohesive global business unit. And since that time, we've enjoyed over 20% growth year-on-year. Specifically in this sector are very focused on transmission and distribution, really where our utilities are looking to modernize their assets to connect green energy onto the grid and also to support the demand that we're seeing with things like data centers being driven by AI, the AI demand at the moment. We have a position already as an adviser and the owner's engineer for major renewables projects around the globe. Most notably, we're seeing ongoing investment in this right around the globe and perhaps most notably, really seeing the energy mix disrupted in Europe over the last 5 years ago for geopolitical reasons and see ongoing investment in renewables for that reason. Probably just to reinforce the point around major program delivery here, we do see probably the power sector as being a sector that enjoyed a lot of investment, a lot of large-scale investment maybe 60 or 70 years ago, but probably less so for the last couple of generations. And so once again, that major program capability we see as being critical for the huge step-up that's being delivered right at the moment in the utility sector. Perhaps that's best demonstrated by what we see here with the SuedLink program, which we're delivering in Germany. Large interconnector project, 700 kilometers of underground cable, the largest of its kind in this network, also the longest underground cable of its kind as well. And so Jacobs was primarily engaged originally for that program delivery capability and expertise. Interestingly, delivering a cable like this underground through historic Germany has become as much an environmental and heritage project as it has become a major program to deliver. In the middle here, we've got the Torrens to Darlington project, which is a missing link effectively for 80 kilometers of expressway through the Australian city of Adelaide, a project that we just kicked off in the last quarter. It will reduce travel times by up to 40 minutes, and it will take away over 20 sets of traffic lights. It will turn a lot of public space back to the community, plant over 200,000 trees. So a great project. It's actually a really interesting project in the sense that it's a twin tunnel project. And the reason that our team were successful is that we came up with a really novel solution to introduce a third tunnel-boring machine to drive the cross passages, which cut out a huge amount of time in the program and delivered a lot of saving and value for money to the South Australian government. And lastly here, World Expo 2020 in Dubai. It was a flagship project for our company, the first expo delivered in the Middle East. Went off the back of our London Olympics experience and also highly relevant, we think, in terms of some of those gigacities that are being built at the moment. This was a program that really was a flat piece of sand. And then 6 years later, it was a new city with a thriving expo operating unit. Skills that we used to deliver that, highly relevant to what we're seeing right across the globe and also for our major events experience as well. So just to round off on critical infrastructure, very resilient, very diversified, very strong end markets that we see here in transportation. Very good demand for all the subverticals in transportation, particularly in aviation and rail. Alternative delivery is a new form -- I guess, a relatively new and emerging form of delivery, especially here in the U.S., where we'll see the private sector play a more increasing role in delivering infrastructure projects. And we see great opportunity in that in terms of how we mobilize our global team to support that increased alternative delivery approach that we see. In energy and power, as I mentioned, transmission and distribution will really drive the energy transition. And we see great demand coming from data centers in particular. And then finally, in cities and places, those complex, sophisticated government buildings will be a key part of this vertical, but also those huge giga programs that we're seeing in the Middle East. And so that footprint that we have for those complex buildings is particularly relevant, we think, for the national security and defense sector. If you think about some of those geopolitical theaters like the Indo-Pacific, Jacobs is very well placed to deliver and support for our clients there. Regardless of all this, we see all of our markets starting to come together and aggregate in the way that we're seeing those converge. Really, like we saw with expo there, we're seeing all of our markets coming together and Jacobs being well placed to deliver in all of those. So perhaps just to wrap up our perspectives on critical infrastructure market at the verticals like transportation and cities and places, really attracting robust long-term investment from both government and private sector, most notably, energy and power, probably the fastest-growing part of critical infrastructure. A great opportunity there with all of our end markets. We also had some relevance to data centers, which will be covered shortly by Koti as well. And so with that, I might introduce Koti Vadlamudi up to talk us through the life sciences and advanced manufacturing sector with a bit more detail. Thanks, Koti.

Thanks, Patrick. I'm Koti Vadlamudi. And this year marks 30 years -- my 30-year anniversary with Jacobs. And I reflect on the markets that we're highlighting. I've enjoyed the opportunity to work in many of them. But the majority of my career has been spent in life sciences and advanced manufacturing. I'm super excited to present to you what we do in that space. Myself along with my colleagues are quite deeply engaged in this space and motivated, whether we're fulfilling the ambitions of artificial intelligence through design of data centers or bringing lifesaving therapies to market. Our teams are deeply engaged in a sense of purpose in framing solutions for society's greatest challenges. You'll hear a continued theme from me about the tenure and the number of decades we have in these market segments, which is to also say over that time, we've engendered deep and long trusted relationships with our clients, in fact, as partners. In many of the submarkets that I'll highlight today, we have a leading #1 position. And we have -- we see multiple secular tailwinds that give us confidence that we'll continue to propel ourselves on our growth journey. Over the next little while, I'll try to articulate some of those market drivers, talk about where Jacobs plays and how we differentiate. Big picture, looking at a glance, this is a segment where we have about 6,500 people across the globe. Our gross revenues are approaching nearly $3 billion. When we talk about our life sciences, we're proud of our pedigree. In fact, even before Jacobs' founding, Dr. Joe Jacobs started his early career at Merck and helped with the commercial scale development of insulin. So we've been in this space a long time. We talk about our expertise at the molecular level, where our subject matter experts and deep domain expertise are working at the biochemistry level with our counterparts to fulfill manufacturing at scale. We've been #1 in this position in pharma for the last 22 years. And I'll highlight some of those large programs where we have deep engagements with our customers. Advanced manufacturing and electronics is also an exciting segment for us. We're #1 in the semiconductor space as well as data centers. We've spent 4 decades in this business, so have long tenured experience, and also have designed over half of the advanced fab facilities globally. And these are the complex 300-millimeter, 12-inch wafer fabs with the more complex microprocessors. Looking at this as an overall perspective, it's about a 2/3, 1/3 split between life sciences and the advanced manufacturing and electronics space. We've been on a healthy growth trajectory, 3-year CAGR of about 17%. In terms of differentiation and our subject matter expertise that gives us the ability to innovate with our clients and drive scale, these are 2 features that I'll talk about in more detail when I talk about the markets. But we've been in this business a long time. This is a place where value tends to outshine pricing. We have early paid engagements with our customers that allow us, as projects get sanctioned, to -- as phases mature in a project, whether we win the work on a competitive basis or get sole source, we have a high conversion rate. As I said, we are #1 in many of the markets you see on the right. Today, I'm going to highlight the pharmaceuticals, life sciences space, the semiconductors as well as the data centers market. This is a busy slide, and I'm going to attempt to make it a little bit simpler. Both Bob and Patrick talked about end-to-end solutions. In this industry segment, both life sciences and semiconductor, this is exactly where we play. We're focused on the full program life cycle. I'm going to attempt to talk about every phase and characterize that both for life sciences and semiconductor. And after I do that, I'm going to come back on the design and talk about some of the facility characteristics that are unique to these facilities in an attempt to explain to you and articulate how Jacobs is highly relevant in this space with our process expertise. So it starts with conceptual planning. This is the early business case phase for our clients where they're relying on our expertise in terms of benchmarking cost and schedule to help them with the business case on the return on investment profile. As we move to the next phase of design and engineering, and I mentioned I'll come back and talk about the facility characteristics, usually, this is where we have a high demand for resources. Once an investment decision is made by a client, these are large -- often large programs, there's a high ramp of resources as they look to bring -- monetize these assets. So this is a place where Jacobs is highly relevant, not just with our process skill sets, but the ability to ramp in terms of amplitude. We move into the program management and construction management phase. This is where we're tendering the subcontract work packages as well as working through the sequence of the work to help onboard the trade contractors and ultimately building the facility. We go into the CQV, commissioning, qualification and validation. And this is a specific term we use in life sciences. This is the phase where we ready the facility for operations and turn over to the client. In semiconductor, that footprint I'm showing, notionally, could be about a $20 billion investment, including the tools, and we're also involved in the tool install phase from a design and construction aspect. On the back end, what we call the sustainment phase, this is often where we have -- leave behind field engineering teams that are embedded within the client organization. They're often looking at debottlenecking projects at the site. They might be looking at new product introductions, new technology. And as Bob said, we've drawn this in a linear fashion. It almost could have been drawn in a circular fashion because it takes you back to the concept planning and the business case. I said I was going to talk about some of the facility characteristics, and I'll start with life sciences. When we look at these facilities, these ultimately have to be approved by regulatory bodies. In the U.S., that's the FDA. In Europe, that's EMA. And a lot of design considerations have to go into the facility, whether it's multiproduct, how we segregate the suites. We look at the flows from raw material to waste to personnel. All of these criteria go in to ensure that the product is both safe and efficacious and ultimately receives manufacturing approval by those regulatory bodies. In semiconductors, I'm going to do a little bit of a rewind here and start with a gentleman by the name of Gordon Moore. Gordon Moore, in 1965 -- Gordon was the former CEO of Intel as well as Fairchild Semiconductor. In 1965, he posited that the number of transistors on a semiconductor chip would -- initially, he said, would double every year. I think he [ massaged ] that in the '70s to say it would double every 2 years. So many of you may know that name. His prognostication became true, and it's known as -- today as Moore's law. I bring this up because the line widths, the geometries on these semiconductor chips are down to the nanometer level. And the sophistication of the tools, such as EUV, extreme ultraviolet, lithography are so sophisticated. A tool may be the size of a municipal bus and the sensitivity, the vibration isolation, the facility behavior structurally are all of paramount importance to ensure that the product meets the quality requirements in terms of manufacturing. So I mention that -- I articulate that this is not a space where you can take conventional technical execution and apply those principles here. You need deep domain expertise. You need to understand the functionality of the building in order to enable these manufacturing ambitions. In terms of market drivers across the space, again, we have deep conviction that we'll continue on our growth trajectory. In the life sciences space, the number of billion-dollar project investments just in the last 3 years has quadrupled. We see a lot of opportunity to use -- as manufacturing needs increase, the opportunity to use digital capabilities, digital tooling as well as our global delivery in terms of resourcing these projects. In terms of semi, strong demand. We see CAGR at 7.5%. This is a market that I think is predicted to reach, by the end of the decade, $1 trillion market. As well, we see in the AI, artificial intelligence, data center space with machine learning tons of demand with data center growth doubling by 2030. This is a serviceable addressable market of about $120 billion. I also wanted to highlight that our specific domain expertise in this area also enables Jacobs to be relevant in cross-cutting technical synergies. I'll start on the right, there's a picture of a confidential data center client in Italy, where we utilized the energy and power skill sets that Patrick talked about earlier to bring an on-site power generation solution to that client. In the middle, our buildings expertise in interior design and office skill sets were hyper-relevant and complementary to our semiconductor experience with Micron at the Manassas, Virginia site. And we enjoyed recognition and accolades for -- from local real estate development association. And the last one on the far left is a pharma client in the Research Triangle Park area of North Carolina. They weren't able to operate their plant at nameplate capacity because of bottlenecks in their wastewater treatment facility. So our team of experts came in, identified that as a bottleneck, came up with an enabling project that's in play right now to allow the client to operate that facility at its nameplate. So lots of opportunity for cross-cutting solutions. Doing a little bit of a deeper dive in life sciences. We have experience with a wide array of different types of facilities from research and development, pilot lab facilities to full-scale manufacturing, whether that's biologics, vaccines, whether that's what we call active pharmaceutical ingredients, abbreviated API, through chemical synthesis. Ultimately, these are drug substances that have to make its way into a form that health care providers or patients can consume. So these go into vials, syringes, cartridges and that's that fill/finish space. You've probably heard about this class of drugs called GLP-1s. Exciting growth segment for us. This is an area that's projected to be $100 billion market by 2028. We also see other entrants coming into this space. As well, you may have heard about the ADC, the antibody-drug conjugates. This is a drug delivery mechanism where we combine a biologics with a cancer agent. And this drug delivery method is proving really beneficial in terms of good discrimination of healthy and tumor tissue. Much investment, see 10 multibillion opportunity -- multibillion-dollar opportunities and drug launches expected by 2029. So the 4,500 people or so we have across this space, highly utilized, highly engaged sense of purpose. There is a society called the International Society of Pharmaceutical Engineers (sic) [ International Society for Pharmaceutical Engineering ], ISPE. Each year, they anoint Facility of the Year Awards. We're proud of, on behalf of our clients, having received 20 of these since 2010. This is a proof that I'm not going to spend too much time talking about. I am particularly proud of our engagement and partnership with FUJIFILM Diosynth Biotechnologies, FDB. I was the executive sponsor and had lots of opportunities to visit site. We levered a technology we called cloning or replication around the drug substance module. By exploiting that strategy, we were able to drive efficiencies of 50% reduction in engineering costs and 80% reduction in supplier costs. This philosophy enables the client to replicate these modules at this site as well as build the exact same facility in Denmark. So tons of opportunity for us. This resulted -- this was a $2 billion investment here, largest of its kind in North America, with a follow-on $1.2 billion phase. As the market digested this as a proof and learned of what we -- the techniques we were deploying, we've won other work with other clients on the heels of this. So let's go talk about the semiconductor market, another exciting space for us that we still continue to see lots of opportunity and amplitude for us to grow. As I mentioned before, expect this to be a $1 trillion market by FY '30. Lots of talk around onshoring. This is about countries such as the U.S. and region geographies such as the Europe that are looking at their supply chain sovereignty. Some of you may know that 90% of complex semiconductor chips come from Taiwan. So there are legislative incentives that are coming on board to sort of restore a little bit of security -- surety and security around that supply chain. As well, we see investment in India. And Bob had the opportunity, while there, to give a keynote speech at the SEMICON conference. As well, he met with Prime Minister Modi to talk about the Prime Minister's ambitions and vision for growing the supply -- the semiconductor supply chain in India. This is fertile ground for Jacobs where we have just under 4,000 people with the technical proficiency to bring these facilities to life. So again, #1 incumbent position in terms of the semiconductor market. We've designed over half the facilities and have the amplitude and scale as the facilities come online to bring our knowledge to bear. Again, this is a proof in the semiconductor space with a confidential client. This is a multi-program, $80 billion investment. I'll just quickly highlight this was an execution that happened during COVID. We had to seek -- we use replication. So the client was contemplating a fab of the future design. They wanted to get one right and then replicate that at subsequent locations. Lots of challenges. In addition to COVID, the client changed the manufacturing sequence of priorities. So we had to pivot our resources to other projects as this was going on. We utilized 15 offices across U.S., Europe and Asia and excellent example of how Jacobs with the proficiency and the process expertise and also having the amplitude to scale up as the client required. Rounding out the space in advanced manufacturing and electronics. I've highlighted life sciences and semiconductor, but we also have some other verticals where we have strong positions, whether that's in pulp and paper, consumer goods, specialty chemicals. We work in photovoltaics, auto plants, EV. We've actually delivered 4 of the largest EV and 3 of the largest battery cell projects globally. So other verticals that help us diversify across that space and strong positions in these markets. I did want to do a little bit of a deeper dive in the data center space, also given all the interest, the secular trend around machine learning and AI. This is a space we've been in for 30 years. We enjoy a #1 position in this with respect to design. In just the last 10 years, we brought on 5,500 megawatts of capacity. We have active projects in 18 countries, and just showing the propensity of growth here, 3 gigawatts of AI-specific high density completed in the last 18 months. As we look at this space, the 40% CAGR there is on CapEx. So we expect, coming off a $300 billion spend in 2023, this to reach $1.1 trillion in 2027. This is a space, again, we've been -- have long tenure. The engagements tend to be smaller than the semiconductor and life sciences markets. But the facilities are becoming more complex. With the advent of AI, the density of the racks require more cooling. All of these are enabled by power solutions, which is to say Jacobs under one roof has the depth and expertise to bring all of this together for a client. So where the engagements are smaller, the complexity is increasing, and Jacobs becomes even more relevant in this space. And just from a context from a growth standpoint, where we had 10 unique clients in this space in '16, we're up to 26 now with an increasing number going forward. So a huge area of growth for us and our ability to leverage solutions across our spectrum of markets. I won't spend a lot of time. If you did an Internet search on Start Campus Portugal and Jacobs, you'd be directed to our website, so you can read a little bit more. But it is a massive investment, 1.2 gigawatts of IT load. We use seawater for cooling. This is connected to 5 continents with subsea cables in fiber optic. This one comes online in 2028 and a great partnership there and a proof for us in this space. I want to just leave these thoughts -- these 3 thoughts. The facilities we design in the space are highly complex. So you need the deep domain expertise that Jacobs has. Large investments with huge ramp in terms of scale of resources. There's a lot of secular trends and market drivers that give us confidence in the growth trajectory that we see in life sciences and semi. As well, to top that off, there's a lot going on in the data center space in terms of machine learning. So I think we have a lot of confidence in the growth trajectory in this space. I'm going to take us to precisely a 15-minute break. I also -- we have today our senior leaders and global market directors in the room. So I would encourage you over the break to engage with them in discussions and deeper dive on some of the market trends that we talked about. And look forward to seeing you all back here in 15 minutes. Thank you. [Break]

All right, everyone. If you could please settle into your seats, we're going to start back up in about 2 minutes with Shannon Miller.

All right. Well, well, thank you, everyone, for hanging in there while we went through a real deep dive by each end market. So hopefully, you got some clarity on what we do, how we do it and how that leads to our inevitable growth. However, those market opportunities and the growth initiatives, these real big differentiators, our President of Growth and Strategy, Shannon Miller, is going to talk to us about what exactly are we doing in order to catalyze that growth in the end markets that we serve. So Shannon, up to you, and then I think we'll wrap it up.

All right Thank you, Bob, and good afternoon, everybody. Let's set that there. I appreciate you taking the time to spend with us this afternoon. I have been with Jacobs since I graduated from college nearly 27 years ago. I've had the great opportunity to work in every single one of our end markets, and I've had the fortune of living in every major geography that we operate in. And now, as Bob said, I wake up every day thinking about the next path of growth for Jacobs, how we can drive the intersection of value amongst our different end markets and focusing on the specific capabilities that we need to build, whether that's digital, expanding our partnership with PA Consulting or the like. So you've heard Patrick and Koti talk about how we're differentiating in each one of our end markets and what that outlook for our core business is. I want to spend the next few minutes with you guys talking and turning our attention to how we're positioned to accelerate our growth and how we're going to focus on capturing the opportunity in front of us. Our industry is at a unique inflection point. I'm excited actually to have my career at this moment in time to see where we are going to go and the solutions that we can deliver. And I think we are truly uniquely positioned to seize the opportunity in front of us and deliver outsized growth. Let's think about it in 4 ways. So first, our clients are becoming more complex. They're requiring delivery models to drive outcomes at a pace and scale that we've never seen before. And this necessitates us to leverage the intersection of our capabilities and our end markets. This is why our superior advisory capability is such a key component to why we are best positioned to redefine the asset life cycle, like Bob spoke about earlier today. We know that when we put our clients' challenges at the heart of what we do, we're able to solve the challenges much more efficiently. And critical to this is developing higher-value digitally-enabled AI solutions. And over the past several years, we've been focused on co-creating our solutions with our customers and have widely deployed digitally-enabled solutions right along with our clients. This has enabled us to lower their investment costs and really their long-term operating costs in their facilities. And as we move ahead, we are rapidly accelerating our use cases for leveraging AI and generative AI to drive profitable growth for Jacobs and capital efficiency for our clients. All right. So this, along with long-term trends in areas that we've talked about, whether that's the race to deploy life-saving medicines at scale, the continued demand to deliver safe and clean drinking water to the communities that we operate in, and the increasing need for resilient critical infrastructure solutions puts us in a very fortunate place to deliver on these industry needs and positions us well to solve our clients' future challenges for many years to come. So lastly, our ability to seize this opportunity is absolutely, and no doubt, underpinned by the core principle of us being a client-centric organization that seamlessly harnesses the breadth and expertise of our globally connected talent force. All right. So with that, I'm going to spend the next few minutes talking through these main areas. And then as Bob said, I'm going to turn it over to Venk to talk about what this all means financially for all of us. All right. So first, if we speak about our specific trends that we're seeing in our industry and how we're leveraging our current position of strength, why we win in the industry to evolve our capabilities and increase market share. So broadly speaking, we've talked about this. Our clients are already being called on and they're signing up for delivering very challenging outcomes. That means we're seeing the size and opportunities of programs increasing, and with that complexity drives demand of cross-market solutions like solving for energy and water demands and resilient and sustainable facility design. All of this is creating a demand for our unique technical talent to deliver these solutions at scale and pace. Here's the great thing. We are operating from a position of strength to support our industry, and we win in our end markets because of our leading positions in program management, digital advisory, particularly with our investment with PA Consulting. And going back to the very roots of our company, we are hardwired to our client-centric operating model. And since our founding days, we've operated with a philosophy of bringing the best and brightest talent to bear for our customers no matter where they sit. So let's spend a little bit of time talking about our operating model. I think this is really important because it talks about how we're positioned and we become even more agile for how we organize ourselves to go to market. I really do believe this is a differentiator in our space. And with our focus over the last several years to streamline our market focus and simplify the way we operate, we're better positioned now to unleash the potential of our enterprise to focus on deploying capital efficiently for our clients and increase shareholder value. All right. I'm an engineer. I like a good equation. I think many of you also probably do as well. So you've heard us all speak about our foundation of our best-in-class talent whether that's process architects who have worked on every single major life sciences facility on this planet; our transportation planners, who see the challenges with reurbanization in Western communities or the rapid rise of the middle class in places like India; and our water teams who are simultaneously working on projects that involve technology improvements in desalinization in coastal deserts or how to plan emergency operations in the eye of a storm. We call on our talent globally to deliver locally. This is amplified by what we think our core differentiators are. You can kind of think about this as our secret sauce and what makes Jacobs special to drive long-term growth. Our culture of caring, Bob talked about this, goes back to our roots of Dr. Joe Jacobs, who instilled in our DNA, our value to operate with the highest of integrity and with the utmost ethical standards. And over the decades, this has evolved to our culture of caring, which, as Bob said, it's about doing what's right, what's right for our clients, what's right for our people and what's right for our shareholders. This, along with our focused investments in areas like digital, advisory and consulting and digital solutions, as well as our investment in PA Consulting, amplify our core of our global talent delivering locally and are the underpinnings of our client-centric model. So we've long been delivering some of the world's most complex and iconic programs. And along the way, we've been codifying our approach, we've been investing in our talent and attracting new talent into our organization. All of this gives us a unique competitive advantage in the marketplace. So Patrick and Koti spoke about some of the iconic programs that we've been delivering. I'm just going to take a few minutes to underscore our expertise in this space and then talk about how we're investing in the future of program delivery with things like early-stage advisory and our digitally enabled platform and leveraging AI and generative AI solutions. This is going to help us maintain our leading position and shape how the industry responds to these challenges. All right. So first, we're the PMC for the Houston Ship Channel Bridge in Houston. It's a 2.6-mile-long bridge. And on this project, we're really taking a holistic approach to look at innovation, safety and really importantly, community engagement to address the needs for future generations. Next, we're very proud that we were responsible for a worldwide critical program, and that was a $5 billion expansion of the Panama Canal. It took many years to deliver that program, and as we know, very critical to the world supply chain. In the United Kingdom, we're working on High Speed Two, which is a state-of-the-art, high-speed rail line that's critical to the U.K.'s low carbon transportation future. It's providing zero carbon journeys between two of the largest cities in the U.K., that's London and Birmingham. And in Saudi Arabia, one of the many projects that we're working on is where our team is engaged in the transformative project of Qiddiya which is Riyadh's entertainment, sports and culture destination. This is a critical development set to transform the economy and society more broadly and is in line with Vision 2030. So here's what's consistent about all these programs. It's our holistic approach to partnering with our clients, helping them redefine the asset life cycle. And we do this by integrating multiple interdependent projects, the associated supply chain, and we effectively manage the asset life cycle. We're enabling them to more quickly and efficiently deploy program deliveries and have fewer setbacks along the way. And driving enhanced capital efficiency for our clients is really not attainable if you manage all of these interdependent projects separately. So as we look forward, we're really going to be focusing on early-stage advisory, setting our clients up for long-term success, continuing to codify our approach, leveraging digital platforms and our AI and generative AI solutions going forward. All right. So on early-stage advisory, we've long supported our customers in conceptual and front-end design. That's what Dr. Joe Jacobs did from the very inception. But what sets us apart now from our competition is our partnership with PA Consulting to really provide that early-stage advisory. With PA, we're able to strengthen our client relationships at the earliest touch points to help them set up for long-term success. It also sets us up to engage in more downstream opportunities, becoming an overall growth driver for our company, and we're able to repeat this with other customers over and over again. Overall, we think that this really does create superior value for our clients, and it's driving a margin improvement for Jacobs across the entire life cycle. All right. Let's look at how our skill sets combine and some of the great wins that we've had so far coming together. So first is [ Project Credo. ] It's a major automotive customer in the United Kingdom. We help them redefine the future of site operations. The combination of Jacobs site and design skills with PA's business case and transformation skills created realistic cost adoptions for future site use. They were looking at redoing a site to make it more sustainable and meet their carbon goals. Next, on Frederick Douglass Tunnel here in the United States, we're combining our infrastructure best practice, our program and stakeholder knowledge with PA's operating model and people change skills to prepare Amtrak for their largest capital deployment ever, and obviously -- or well, not obvious, but a very accelerated schedule. And finally, for the U.K. Health Security Agency, we're working to create a world's first biosurveillance network program, enabling the early detection for future pandemics. So we're working closely with them to set the strategic direction to deliver a large-scale, cross-governmental, transformative and technical solution. This is really a prime example where we're delivering high-margin services upfront for a nationally significant program, and the follow-on opportunity is that, that presents, not only with the U.K. HSA, but we think that this value proposition extends to other governmental agencies. So these are just a couple of examples where we see our skill sets matched up nicely across both companies to deliver unique outcomes for our clients. All right. We're going to spend a few minutes talking about digital. I'm going to talk about it in two ways. So first, we'll talk about it on the client side and then how we're embedding it in our business operations. So starting on the left side, we're making our clients' businesses better with our cutting-edge digital solutions. We've built a digital consulting footprint with over 1,500 dedicated employees, far more than our closest peer in the industry. And we're excited about our industry-leading partnership with Palantir. We've been scaling our Digital OneWater platform with them, delivering tangible OpEx savings. In our platform, it includes our products like AquaDNA, Flood Modeller and Intelligent O&M, and it spans the entire water life cycle, all the way from planning to operations. Our flexible infrastructure is allowing our clients to overcome any gaps in their expertise or in their enterprise architecture. And we're really excited that this platform was built by water industry experts, [ Susan ] is one of them, for water industry experts. And beyond water, we have an industry-leading Software-as-a-Solution platform across our other market sectors that we're operating in. We acquired StreetLight Data just about 3 years ago. Streetlight provides transportation analytics for efficient, safe and sustainable infrastructure by taking advantage of trillions of data points basically from things that move, whether that's smartphones or connected vehicles. Building on StreetLight's planning products, our people have been delivering forecasting tools that are leapfrogging the status quo. We've developed specialized tools for avoiding traffic apocalypses during our own construction projects, delighting local drivers, which is fantastic to hear. And we've been building out AI-based solutions that we continue to enhance real site over time, real site oversight -- real-time oversight for all of our transportation planning needs. All right. Next is [ Acuity. ] It's our AI-powered product that's designed to enhance real-time aspects of program delivery. By leveraging spatial data and now also unstructured program data, we're able to provide a comprehensive understanding of project safety, cost and schedule. So Acuity provides early indicators and predicts mitigation strategies to optimize program delivery and minimize impacts to the project. And the connection of previously siloed data sources is enriched over time from planning through construction, increasing operational readiness and knowledge transfer at each hand over the program's life to support efficient operations and maintenance. And in the national security space, I'll mention 2 products that we have there: first, KnackStack, which provides secure IT infrastructure for DevSecOps. It's really helping with the most challenging missions in the United States providing a very strong defense against cyber threats. And Blackstack is our software-accelerating sensor collection platform. It provides real-time analytics that facilitates real-time insights from huge, high-volume data sets. All right. So we're also embedding digital and AI into our organizational fabric. It's making us a better and more efficient business. We've been consolidating our data as an organization, and it's making amazing things possible with AI. We've already began to launch Jacobs AI, which is our internal generative AI platform that's spanning across the entire life cycle in our business. It's doing things like automating proposal development to intelligent operations and maintenance on our clients' computers. And we see a clear path to leveraging AI agents as an integral part of Jacobs. We're focusing on the highest ROI use cases, but prioritizing protection of our data and our intellectual property. We're also deploying generative AI for client-facing solutions like Engage AI and Plan Review AI. Engage AI is our advanced stakeholder management program. It's transforming how projects synthesize and integrate public input into decision-making. So by combining generative AI with our expert oversight, Engage AI rapidly categorizes and summarizes comments. It's letting our clients make better decisions, respond to the public more quickly and develop more equitable infrastructure. And finally, we're accelerating our development of generative AI solutions to move from conceptual sketches to rendering so we can rapidly iterate with our clients and help them visualize what a facility would look like. And from there, we're scaling our design automation and augmented design capabilities, which is enabling our clients to put assets online faster to meet market demand. I want to leave you with this point on digital. Our overall philosophy is that digital is an enabler across our entire enterprise. We combine it with our subject matter expertise in each one of our end markets to co-create solutions with our customers. We're focused on building a flexible technology agnostic tech stack with industry-leading partnerships, I mentioned a few of those here today, that's really helping us leverage the best technologies in a rapidly changing landscape in the market to help us tailor them to our client needs. We're using our domain expertise, industry-wide technology expertise to develop these solutions. And as we continue to deploy our solutions, we're actively refining our commercial models to better serve our clients, and our adaptability ensures that our clients are able to seamlessly integrate and benefit from our insights and our offerings. All right. Let's talk about where we've seen some of this come to life and where we've been gaining momentum. So we've seen this as a key reason that we win, and I'll talk about 4 examples here today. But really, it's because our digital products are scalable. They're industry-wide scalable solutions. We're finding them sticky, meaning the customer wants to keep using them long after we've ever built a facility, and we're providing unparalleled proximity to our client data. It's bringing us closer to their challenges and aligning our solutions effectively with what they need to solve for. So here's a couple of key wins where digital has been a differentiator. Let's go back to Saudi Arabia, where they're delivering many programs in and around Riyadh. Digital innovation is absolutely required to meet these challenges and drive the efficiencies and the effectiveness at the same scale as the project development. And so this is where we've started to build our digital platform for program management, which is Acuity and has been part of our recent win with RIPC. They're focused on coordinating a massive amount of construction schedule interfaces across Riyadh with all the development that's going on. Next, with the occurrence of stronger and more frequent hurricanes, we developed our digital resiliency and response system for the Puerto Rico Aqueducts and Sewers Authority in just 3 months. And that's helping them support day-to-day operations for the planning, response and recovery efforts related to a catastrophic event. And we're incorporating cyber security in all of our water and wastewater treatment designs. Last week, hopefully you saw, we just announced a recent win with Hampton Roads Sanitation District where we're delivering the largest cybersecurity assessment of its kind. And we are quickly becoming the key provider of stand-alone cybersecurity assessments for major -- for all of our major client accounts, including the facilities that we operate and maintain. And we've added 40 more just so far in fiscal year '25 alone. And then lastly, we spoke about StreetLight, but I love this example that demonstrates the stickiness of our platform and the use of our subject matter expertise. In a recent win in Broward County here in Florida, we won because of 3 things: one, our local expertise. So we brought the best talent locally to deliver for their communities; number two, we had to reach back to our subject matter experts in a way that they felt confident that they were one phone call away to getting the expertise that they needed; and three, because of Streetlight data and the differentiator that it brings for mobility data. And they said, you can read the quote that you just can only imagine that with using data at the power that we can that they're going to have better bus route planning and better infrastructure for their citizens. And maybe just going back to what I said earlier about the industry needing to bring cross-market solutions to deliver projects more seamlessly. And we've been rooted in our client-centric model where we put the client at the heart of our business and we bring the capabilities to bear for what they need. And this is a differentiator for how we operate. It helps us also move up the advisory curve with PA Consulting. It's helping us embed digital solutions early on, like I just spoke about. But it's also leveraging our capabilities like buildings, water and energy across all of our end markets. So maybe I'll just highlight 4 key wins and projects that we're working on to date that bring to life our client-centric approach. So in late 2024, we were selected by the LA Sanitation and Environment to deliver this progressive design build project, the Tillman Advanced Water Equalization Basin. It's another critical part of L.A.'s plans to increase recycled water production, which is a testament to our long-standing partnership with not only the city of Los Angeles, but more broadly to the State of California, where we've been part of some of the largest critical infrastructure projects that they've taken on. In Denmark, with Copenhagen Metro, our infrastructure and metro operational experience, combined with PA's local knowledge, their stakeholder relationships and procurement skills, is helping shape a large-scale future client side partner opportunity for us as an organization. And hopefully, you saw yesterday, we just announced a huge win with Xcel Energy, where we're providing modernization, resiliency planning and program execution from one of the U.S.'s largest utility providers. We are the program manager and owner's engineer in their ongoing efforts to provide customers with safe, clean and reliable energy at a competitive price. And along with that, we're responsible for standing up a central program management office as well as our major projects group to help them drive consistent delivery execution across the entire portfolio of transmission, distribution and generation projects. And by tackling their energy needs today, it's helping us set up for where we can expand in the future, whether that's in facility design, water or environmental work with Xcel. And lastly, with King Salman International Airport, we are providing comprehensive advisory and engineering services, including their concept master plan and detailed master plan, landside and airside design engineering and more. We're leveraging our very strong local footprint that we've been building up over decades in Saudi Arabia to support our vision of 2030. Our expertise and insights have been instrumental in making this come to life. And with PA's global aviation expertise and sustainable aviation strategy, our unmatched technical excellence in aviation advisory, planning, design and large-scale infrastructure projects, both globally and regionally, we're able to help them build what they're calling an aerotropolis. And we're also helping them with the development of a comprehensive sustainability, health, safety environment and quality strategy framework to help make sure that sustainability is embedded in all that they do. So these are just a few examples that show the value of our operating model, how we're able to bring all of our cross-market capabilities to bear and how we're amplifying that with PA Consulting in our digital business. Koti mentioned this about how we're able to rapidly deploy talent for projects. We've been investing in our global delivery platform for decades. I know when I joined as an engineer, I found myself in Europe, and we had a very robust team in India that was helping us do all of our projects there. It's been going on for decades at Jacobs, where we've seamlessly been deploying global talent. This is a fantastic example of how we're able to help a customer that had multiple projects going on at a given time and we were able to ramp up from 0 to 1,000 people in under a year. So we're able to bring the resources to bear to deliver that major program of work. It also gives us things like a 24-hour workday. We're able to leverage multiple time zones to provide a round-the-clock service for our clients. But honestly, it's the only way that we can do these global projects at scale and not have these huge ramp-ups and layoffs. It really does provide a very sustainable platform for us to deliver. And this is an underpinning to our competitive advantage and our foundation. Now if I think about where we're going to take this over the coming years, we'll talk about it maybe this way. So we think about delivering projects in sort of 2 ways: global delivery and cross collaboration. And when we combine that element, nearly 40% of our business is using resources through our global delivery centers, whether that's in Poland, all across India or the Philippines, or a cross collaboration, where we're leveraging talent regardless of where they sit to deliver locally for a client. We've been investing in our platforms, our tools and our technology that, coupled with our culture, is helping us steadily grow the proportion of work that we're doing from a work-share opportunity. And we see the path to continue to increase what we're doing, and it will be over 50% in the next couple of years that we'll be delivering through cross collaboration and global delivery. Here's a few ways that it comes to life for our clients. So first example, if you think about experts delivering rapid response for local emergencies, so perhaps a response for FEMA, here in the U.S., one of our federal clients, it involves local employees that are at the site where we're having challenges, but they have reached back to our entire global capability set. Our experts in advanced facilities, energy and power and water are all enabling the AI data expansion. I'll talk about that here in a few moments. And with our power experts, geothermal power specialists are driving desalinization advancements or our power experts are generating biogas for wastewater treatment plants. And this last example is really going to help us grow this intersection between water and energy and how we can solve those challenges. All right. Let's turn our attention to an AI data center. I think it's a prime example that talks about the interconnection of our portfolio and the power of our operating model. So on the screen, we show the entire sort of life cycle of an AI data center. You've got the data center itself, the water treatment, reuse and cooling plant, power generation requirements, whether that's a small nuclear reactor, a thermal generator or perhaps renewables, the connection to the grid, the environmental and sustainability considerations for the location itself and of course, the digital services and cybersecurity to safely run the facility. When we put the customer at the center of this, we're working with clients like our hyperscalers, but also development companies, energy and utility providers are all thinking about how they get around this challenge in unique ways. We have long-standing relationships in all 3 of those customer segments to really help them solve the challenge. So when we combine our leading digital capability advisory with PA, we're uniquely able to address every single element of the data center life cycle, whether that's the facility EPCM itself, energy and power design, water and environmental, digital. And with our global platform and talent, we can rapidly scale and deploy our resources to where the need is most pressing. And so when you think about our interconnected portfolio and our operating model, we're able to quickly translate these client challenges into solutions. So we leverage our cross-cutting capabilities from all the way from end to end, project advisory, all the way through operations and maintenance to drive differentiated growth. We're able to capture more share of wallet with our customers. We can deploy our talent and reduce resourcing, our cost of sales goes down, and of course, we can create and sustain lower capital solutions for our customers. All of this is giving us great benefits for our clients and our shareholders. So AI data centers is just one area that we see as a really powerful growth vector for Jacobs as we move forward. I mean I think that, that really does sort of exemplify the power of our operating model. But holistically, we've looked at 7 areas where we think we can really drive growth across all of our end markets to create lasting impact, cement our future -- future leading position, of course, leverage our power of our operating model and expand our addressable market and our share of client spend, but really also drive industry-leading margins. So this includes things like program management. We've talked about this. We're going to continue to evolve and invest and advance our capabilities to maintain our global leadership to solve complex, large programs at scale. We're going to enable the next generation of data centers to address the massive compute requirements of AI. We're going to continue to be an industry leader in providing safe and clean drinking water to communities and citizens by removing emerging contaminants, and we're going to focus on growth in energy and power. And in critical infrastructure, we are best placed to deliver resilient and sustainable solutions, whether that's transportation, all modes of transportation, cities and places, health and life sciences. And we think that by addressing on these growth vectors or focusing on these emerging challenges and growth vectors, our serviceable addressable market expands by about $160 billion. So this not only increases the robustness of our pipeline, but it gives us the confidence to deliver the strategic plan that Venk is going to talk about in a few minutes. So I'll leave you with a few takeaway points. I'll start with the bottom one first. Our operating model is centered around people at the heart of all that we do, whether that's our clients or a global talent force. And with our end market focus and critical infrastructure, water and environment, life science and advanced manufacturing, I think we're better positioned than ever before to drive outpaced growth. And we do this twofold, 2 kind of key points we want to hit on. One is by expanding our capability further up the value chain, starting early with our customers with early-stage advisory, leveraging the power of PA Consulting and our focus on codifying our approach and developing AI-enabled solutions with our clients to drive capital efficiency and profitable growth for Jacobs. So now I'm going to turn it over to Venk Nathamuni, our CFO, to talk about what this means financially. Thank you, Venk.

Thank you very much, Shannon. Good afternoon, everybody. I guess we're in the home stretch now. My name is Venk Nathamuni, and I started at Jacobs about 9 months back, making me the newest member of of this fantastic company. Really, really excited about the journey we are about to embark on. And I'll share a little bit of those insights in the next upcoming few minutes. By way of background, I worked in the semiconductor industry. I was in Silicon Valley for about 25 years. And if you've heard from Bob and Shannon and others, lots of opportunities for us to embrace technology in a very meaningful way and really excited about that. I guess I'll start by something that Bob said at the very outset of this meeting, which is, our role and central role in redefining the asset life cycle and the power of focus that we get by focusing on these 3 major end markets across water and environmental, life sciences and advanced manufacturing, and critical infrastructure, all of that underpinned by our deep and broad collaboration with PA Consulting across the entire swath of those markets. And what that allows us to do is not a focus on execution on the organic growth front, but gives us a lot of insights into each of these markets and our client engagements, allowing us also to expand margins in a meaningful way. And last but not least, we are committing to lowering restructuring in a meaningful way going forward so that our results will be clearer for everybody. Let me now start with each of the major facets of this. I'll start with revenue. What gives us the visibility, I would categorize into 3 major buckets. On a near-term basis, clearly, as we have announced in the last couple of earnings calls, our backlog right now is at $22 billion, a record for the company, and it grew by 19% year-on-year driven by a lot of these marquee wins that a lot of people talked about already. And then looking out into the medium term, we have a very robust pipeline, spanning all the different end markets that we talked about. It gives us multiyear visibility because a lot of these projects take 3, 4 years, in some cases, especially the large ones, and that gives us a very strong visibility into our performance over the longer term. And then equally importantly, these secular megatrends that Bob, Patrick, Koti and Shannon talked about are truly multidecadal in nature, right? Take life science as an example. Koti pointed out, there are multiple billion-dollar opportunities in our pipeline. If you look at semiconductors, I'm from the semiconductor industry, we're still in the infancy in terms of moving manufacturing, especially for advanced facilities from China and Taiwan to the U.S. and Europe. And we are so centrally located in being able to capitalize on this secular megatrend. And then last but not least, as you look at the other end markets that we participate in, it's the ability for us that is so unique to be able to do the cross-cutting across those various end markets. So when you take all of that into consideration, we feel there's a tremendous opportunity for us to grow our revenue from where we've been to now where we're going. Talking about where we're going, I want to start with where we ended fiscal '24. We did about $8.3 billion in revenue. And looking ahead into the strategy cycle, we think we can grow it by roughly 6% to 8% compounded annual growth rate, which leads us to about $11.6 billion revenue target in fiscal '29. Let me now give some additional color on each of those markets and how that plays out. With modern environmental, as I stated before and as you've heard from my colleagues, this is a market where we've been seeing robust growth. And especially in light of some of the major wins that we talked about in the last several quarters, we see that opportunity for us to expand that market growth rate to the high single digits. Life sciences and advanced manufacturing have 2 major facets to it. On the life sciences front, Koti eloquently talked about our unique position in that market across a multitude of different companies and clients, but also in terms of multitude of categories, all the way from GLP-1 to oncology and so on and so forth. And then on the advanced manufacturing side, we already talked about the semiconductor piece. But outside of semiconductors, we have the opportunity for industrial manufacturing to also be reshored to the U.S. and to Europe. And we're very well situated to capitalize on that. And then critical infrastructure, you heard from Shannon about the global trends there in critical infrastructure, which allows us to grow at about mid-single digits. And last but not least, I want to focus on PA Consulting. We are seeing tangible signs of an inflection in growth in PA Consulting when we look at the pipeline, and we feel that this business can grow at 6% to 8%, not only in fiscal '25, but beyond as well. So margin expansion is the next major area of focus for us. And this is something that we're equally excited about. To put things in context, in fiscal '23, as many of you who have covered us for a long time know, this was the combination of what we see today as independent Jacobs plus our CMS and C&I business that we divested back in September of 2024. We were at 26% margin thereabouts. Fast forward to end of fiscal '24, our margins grew to 34%, primarily driven by the change in mix. But in my opinion, we're just getting started on our margin journey. And we have some specific identified buckets where we can help improve the margin performance over the long term, such that we believe we can deliver about 250 basis points of gross margin improvement between today and fiscal '29, leading us to about 36.8% in gross margin performance by the end of the strategy cycle. Let me now double click on some of the key factors that drive that margin story for us. Before I talk about gross margin, I want to start and give you context about EBITDA margin. So EBITDA, 12.8% in fiscal '24. And as we look ahead, the major contributors to margin expansion, it will be a combination of gross margin plus leverage. On the gross margin front, we have 3 specific buckets. Shannon talked in great detail about our unique position in global delivery, where we have a solid footprint in a lot of the geographies where the skill sets are fantastic. Not only does it give us the ability to implement projects 24/7, but it also gives us the ability to improve the efficiencies because these are lower-cost geographies that allow us to implement projects regardless of where those projects originate across the globe. This is going to be one of the key drivers of our margin expansion story over the next few years. The next piece I want to talk about is commercial models. Here it all boils down to: we are adding a lot of value to our clients in terms of the capabilities we deliver, how do we capture some of that value for ourselves in terms of margin expansion? Patrick alluded to, alternate delivery is one of those mechanisms. Shannon talked about our digital efforts in AI and so forth, but there's a multitude of opportunities for us to expand our margin from a commercial model perspective. And then last but not least is our focus on mix. Going back to Bob's comment about where we stand on the asset life cycle, the more we're able to get engaged with our clients earlier in the project life cycle, in the consulting and advisory space as an example, allows us to capture more of the margin value for ourselves. And then on top of it, with mix, with the increased level of digital content, that allows us to also expand margins in a meaningful way. So when I put all of these things together, that's how we get to the 250 basis points of margin expansion on the gross margin front. But that's not all. When we now look at our operating model, I want to focus on where we are in the journey as it relates to operating leverage. We are very focused on ensuring that we grow our top line at a much faster clip than we grow our operating expenses. That, alongside with all the efficiency improvements that we talked about from an AI and digital perspective, gives us a lot of runway to be able to expand the margins in a meaningful front. And to put it all together gives us the visibility to get to north of 16% from an EBITDA margin perspective for fiscal '29. And to put things in context, that's a total of 320 basis points of expansion from where we are today to where we think we can be in fiscal '29 or roughly $1.9 billion of EBITDA by fiscal '29. The third element of the margin front is free cash flow margin. We truly believe free cash flow margin is one of the fundamental drivers of value creation, not only for investors but for all stakeholders. And as you've seen, we have made some strides there, but we think there's a lot more for us to be able to deliver such that we can get to 10% plus free cash flow margin for fiscal '29. Obviously, a lot of the improvements that I talked about in terms of gross margin and EBITDA margin will flow through. But in addition to that, we have the opportunity to improve our working capital performance with better DSOs and DPOs. And then over the last several years, our capital intensity has been roughly, call it, 0.8% to 1%, 1.2%. We think we can be in that range going forward. And then last but not least, from a cash flow perspective, as restructuring costs decline, that should aid our free cash flow as well. Now I'm going to turn the focus to our balance sheet. I want to reiterate that we're starting with a very strong balance sheet position with a net leverage ratio currently sitting at about 1.1x. But as you look at the historical performance over the last, call it, 2.5, 3 years, our net leverage has stayed within the range of 1.5x to 1x throughout this period with the exception of Q3 '22, where we were slightly higher, driven by our acquisition of StreetLight, but as you can see, we quickly delevered such that we're now back in the range that we want to be. We are very focused on making sure that we maintain our investment-grade rating. And one other thing that's going to help our balance sheet is that, as you all know, we have a retained stake in Amentum. And our plan, as we alluded to in our earnings call recently, is to be able to disposition our share of Amentum stock in the first half of calendar '25. Let me now turn the focus to capital returns. Before I talk about our capital allocation going forward, I thought it would be beneficial to take a snapshot of how we've done from a capital allocation perspective over the last 4 years. As we all know, 2 major elements of capital return, obviously, dividends and buybacks. On the dividend front, we've done a really good job of growing our dividend at 11% compounded annual growth rate over the last 4 years. And from a share buyback perspective, we've done even better at a 14% compounded annual growth rate. So now I'm going to -- and I'll also make the observation that, that translates to about 60% of our free cash flow return to shareholders. Now if I look ahead into what our capital allocation strategy is going forward, without a doubt, the #1 priority for our capital allocation is to invest in organic growth. You've heard from my colleagues about the excitement that we have, the secular megatrends in front of us and the opportunity for us to grow our top line in a meaningful way. So we're going to invest in that while maintaining a strong balance sheet. The next pillar of capital allocation for us is to return that capital to shareholders in the form of both dividends and buybacks. And while we've been historically returning about 60% of our free cash flow, we're committed to delivering at least 60% going forward. And in some years, we could be even more aggressive than that. And last but not least, from a capital allocation perspective is strategic M&A. I'll give a little more color in an upcoming slide about our philosophy around M&A, but suffice it to say, in the near term, organic growth is our singular priority. Longer term, we will continue to look at opportunities for us to expand, and where we'll spend most of our effort there is the cross-collaboration capabilities that you heard from my colleagues about. So let me just give a little bit of color on how we think about M&A -- and one last thing. As you know, last quarter, we announced that our Board of Directors authorized a $1.5 billion repurchase authorization, which, again, shows our true commitment to returning cash to shareholders in the form of buybacks. Let me now focus on M&A. M&A, for us, is not a strategy in and of itself, but it's an accelerant to our strategy. Clearly, from a strategic perspective, M&A has to make sense. But once you cross that hurdle, we have some specific financial criteria that we want to use in terms of evaluating these opportunities. It starts with -- you've heard about the excitement around our organic growth. So when you do M&A, it better be more accretive from a growth perspective, but also equally, from the standpoint of profitability, we don't want to do something that's dilutive. And certainly, we are focused on things that can expand our margin over time. And last but not least, as we pursue M&A, we'll maintain that strict discipline to ensure that our balance sheet remains strong. And just to reiterate, from a short-term perspective, the focus is singularly on organic growth. But longer term, we will use M&A to accelerate our cross-cutting capabilities. So if we put all of this together, we're really excited about the model for the next 5 years. Starting with the top line, 6% to 8% revenue growth translates into EBITDA margin of 50 to 80 basis points per year or in total, 320 basis points over the strategy cycle. The EBITDA growth rate will then be between 10% to 14%, which is roughly twice the revenue growth rate, showing leverage in our model. And last but not least, our focus on free cash flow generation and returning that free cash flow to shareholders in the form of buybacks and dividends. And one more thing, we just announced our results a couple of weeks back. We are again reaffirming our guidance for the full year. And as many of you recall, we raised our midpoint of EPS guidance, and we are comfortable with the full fiscal year '25 guidance. So to sum it all up, really focus on organic growth. As you can tell, solid business fundamentals in terms of high cash flow generation and a strong balance sheet. Our commitment to not only grow the earnings, but to grow the quality of earnings going forward. It's not just about growth, but growth with margin expansion. And last not least, generate a lot of free cash flow, return a lot of the cash flow to shareholders. With that, I'll conclude, and I thank all of you for your continued interest and continued support. And I'll turn it over to Bert now to do the Q&A session. Thank you.

Well, thank you, everyone, for being with us the last 2 hours. We are running about 5 minutes over. We're doing fine. So we're going to do 30 minutes for Q&A. So I ask our leaders to come up here. [Operator Instructions] We'll have [ Nora and Luis ] on either side, and they'll be passing out mics. So just raise your hand and they'll come by, and we'll get started. Also, maybe just a round of applause for everyone. Appreciate their prepared remarks.

We have a seat for our CFO, right? Okay.

All right. Jamie, closest.

Jamie Cook, Truist Securities. Just wanted to focus a little on PA Consulting. Obviously, the importance to Jacobs was very clear, given your presentation today. But can you remind us of PA Consulting today, how much is still -- you're doing most of the business in the U.K. or overseas versus how much success we've had pivoting that business to the U.S.? And to what degree as we want to get bigger in sort of the advisory-type stuff do we need to think about inorganic growth in the U.S. with a PA Consulting-like business?

Sure. Thanks, Jamie. Am I on? Yes, yes, yes. Thanks, Jamie. So maybe just a quick background context setting and then right to the question, Jamie. Just if you look at the last 4 years of the investment, the partnership, we came out of the chute red hot. The first 18 months, I think we were on a 25% top line CAGR, and that was really driven by everything that was happening with regards to the pandemic and PA's entrenchment with the national -- with NHS in the U.K., not just on the development of the ventilator and means and methods in order to the -- the pandemic, but more so on the digitization of the distribution of the pandemic. The thought was, is that as the pandemic was easing that we would then pivot that continued growth model to the U.S., what we didn't anticipate was there to be multiple elections in the U.K. and a pretty severe U.K. recession. And so our focus really was to balance the business in the U.K. Now flash forward to today, and you've seen some of that flatness in the business over the course of the last couple of years. We are seeing that inflection point today. That is being driven both with the recovery in the U.K., but also the growth in the U.S., coming off of a smaller base. So right now, Jamie, the balance is about 80-20, 80% of the business is in the U.K., 20% outside the U.K. And in the U.S., we are back to double-digit growth in the U.S. and really excited about the opportunities. Shannon highlighted a couple of those strong wins that we've had and the pipeline is really strong. Yes. I mean I'd like to see that be more like probably 30%, but it wouldn't be -- it wouldn't have to go much more than that. I think that 6% to 8% top line CAGR that we're talking about for PA would require for us to do that in the U.S. But -- and hopefully, at the reception, you can talk to Christian Norris and Jiten Kachhela. We see that right in front of us today.

Jerry, go ahead.

Jerry Revich, Goldman Sachs. I'm wondering if you could just talk about the capital allocation a little bit more. So the free cash flow targets bank that you laid out, just putting the pieces together, if you only focus on buybacks instead of M&A, I think the math suggests $35 million, $40 million share-type buyback. I'm wondering, can you comment on, is that directionally right based on what you folks laid out? And is M&A essentially a footnote? If something really interesting comes along, we'll do it. Otherwise, now the plan is to buy back a significant amount of stock towards the number that I mentioned.

Yes. Thank you, Jerry. Let me start off and then maybe Bob can add to it. At a high level, from a capital allocation standpoint, as I said before, we are committed to returning a lot of the cash to shareholders. But certainly, that's after we spend money on organic growth with all the digital initiatives and other opportunities that we have. So nothing prevents us from increasing it in a meaningful way. As you saw that in our Q1 results, we had the highest level of buybacks, and we'll continue to do that what we think to be aggressive from a repurchase standpoint. Having said that, from an M&A perspective, clearly, the short term, we are focused on organic execution. Longer term, we do have that as an option. We do get a lot of opportunities in front of us in terms of how do we look at something that's crosscutting in nature and so forth. And then even from a PA perspective, certainly, there is an opportunity for us to expand that as well. So we want to keep our balance sheet strong, be committed to the return policy, but also have the flexibility such that we're able to do the right thing in terms of creating overall shareholder value over time.

And in terms of the margin targets, really interesting to see the confidence on 50 basis points plus per year of margin expansion on a multiyear basis. Can you just share with us what are maybe the 1 or 2 key indicators for each of the buckets that you've outlined that shows us, hey, next year, we're on track to drive that margin improvement, whether it's number of people working on global delivery versus other metrics, just so we can tell how we're tracking towards that multiyear target.

Yes. Maybe I'll take that one. So Jerry, there was kind of 2 slides that I'd point you to. One is what Shannon highlighted with regards to that blend. That's kind of pointing to where we're going. What's backing that up is the strength of our backlog. If you look at that 22% -- or I'm sorry, 19% growth in our gross revenue backlog, that's got some -- and you saw it in the book-to-bill, especially in Q3 and Q4 of last year, that's got some work where we're delivering that work globally. So we're already starting to see that now. Our hiring right now in our global design centers is higher than it's ever been. So we've got some nice financial indicators that are showing forward as well as in real time, the hiring of the people. Now what's kind of underpinning that is, and you heard Patrick, Shannon and Koti talk about it, is the use of digital enablement. So whereas today, we would have needed -- I'm sorry, yesterday, we would have needed 2x the number of people, we're able to do that with a lower number of people and digital platforms, these terms that the team was using around digital twinning, cloning, design once, build multiple times, that's all coming into play, too.

Chad?

Chad Dillard from Bernstein. So you guys talked about a lot of growth in your core end markets, lots of tailwinds. What I wanted to understand is the opportunity for above-market growth. Maybe you could lay out maybe the 3 top opportunities that you see. And then secondly, on the cost savings or the margin expansion, how does that layer in between now and 2029?

Chad, I was -- the markets piece, I didn't get.

Do you mind repeating that? It's a little bit soft on this end for some reason.

Ahead of market?

Yes, just ahead of market growth opportunities, yes.

Yes. I think it's a lot of this is the differentiators. I mean, Shannon talked a lot about where we're focusing our investment and our time and energy and those differentiators putting us ahead of what those growth CAGRs are for the end market. The other is around -- and the entire team talked about it, convergence, right? What we're seeing today is the nexus of energy and water, energy and data centers. Koti had a couple of examples where we had water and the life sciences sector. So that's also allowing us to grow in excess of what the market CAGR is as well. How we count -- how we count the dollars and which vertical, is it a water job? Is it -- we've had this internal debate right now is that pretty soon, with the AI data centers, that could turn into an energy and power job, which, oh, by the way, there's a server room there, right? So we got to work on that on how we articulate that. But it's an exciting time.

And I'll take the second part of the question in terms of your -- on operating leverage, right? So clearly, to the extent that we're able to grow our top line at a much faster rate than our OpEx, that drives significant leverage in the model. And then all the efficiency aspects of our business with digital and AI, that should also allow us to grow the revenue faster than how much we're spending on driving that growth. And last but not least, we've talked about in the last, call it, 6 to 7 months, our cost structure, in general, we're now seeing the full annualization benefits of that through the rest of fiscal '25, but there are still more things to do in the outer years. So that's what gives us visibility into improving the cost leverage over time.

Yes, Mike [indiscernible]?

Yes. Mike Dudas from Vertical Research. And I thank all of you for all -- I know you put a lot of work into sharing your vision with us today. So this will not go unnoticed. First, when you put up on the -- with all that -- you put out the types of projects, these multibillion-dollar programs you have for many of your key clients globally, can you share a little bit about what's the scope of Jacobs' actual revenue that you generate and how that might change throughout the process, how it may grow that wallet share? And what type of margin you start with and what you can generate on these types. Because when we see these orders that come in and these backlog numbers are very supportive, how can we get to translate that to real dollars and over time and the real margin you can generate?

No, Mike, thanks. I'm going to ask Patrick to talk to that one.

Yes, Mike, it's a difficult one to answer directly because in some cases, some of the project values are reflected in the total Jacobs scope, and in other projects, it's just a percentage of it. I think if you think about the margin profile and flow though, the earlier that we are typically engaged in advisory services, consulting services, concept phase services, typically sort of see higher margin profile in those sorts of services, but still very robust, particularly when we can leverage things like global delivery and automation for some of the downstream design services as well.

And can I also follow up the discussion on your energy power and the data center opportunities. I think you said maybe 30% of that is U.S. versus global? Is that a fair number? Or I can't remember what you had.

Actually, I think it's flipped. Koti, do you want to take that one?

Yes, it's probably flipped the other way, Mike.

So 30% international and 70% is -- how do you can see that market evolving given the major needs relative to, say, how the -- your other advanced manufacturing life sciences markets have evolved over the their cycles? Like the semiconductors. Again, you say you're early stages, but how does that compare of what you've seen in semis to what you could see in AI? My guess, it sounds like it's going to be a lot quicker and a lot more demand from an energy and power side that might drive more of your services. So maybe I'd be interested in your thoughts on that.

Yes. I think you're -- I think that's a correct assessment, Mike. Maybe I'll say a couple of comments, and Koti, you can kind of back it up. Interesting, what the -- we'll kind of hone in on the hyperscalers. What the hyperscalers have done, at least in my career -- we haven't seen this historically, and it's showing up in the valuations of the electrical OEMs -- is that the hyperscalers have, without solving for how is the on-pad, on-source energy needs going to be delivered, they went ahead. They know the amount. So they went ahead and forward bought a lot of the electrical equipment transformers, switchgear, UPS systems, et cetera, while they've hired folks like Jacobs to do the studies on, okay, do we have a microgrid, do we have a tie to the municipal grid? All of those things are being worked out now. But the signal that you see in the CapEx and you see it in their buying patterns, I mean they have bought -- the lead time for transformers right now for any of the manufacturers, Eaton, Schneider Electric, Hitachi, anyone, it's over 75 weeks. And so they've kind of signaled, hey, we're going forward here. So I don't know, Koti, if you want to...

Yes, I think that's my assessment as well, Bob. What I'd also say for Jacobs, the relationships we have with hyperscalers, plural, we have an opportunity to look at their portfolio in the investments across their CapEx, and I showed some numbers there, some really, really strong growth projections. We also -- so those relationships, and we also exploit the relationships we have in the energy and power side with the grid providers. And I think the confluence of those 2 relationships enable us to bring visibility and solutions to those customers. But it's a huge problem. I met with one client, and they're actually metering their CapEx based on the capacity and the trades, the electrical equipment. So we do see, as I said, a long secular tailwind, and I think it could much -- look much like we saw in the boom in semiconductor from an E&P as well as a data center perspective.

Yes, go ahead, Saba.

Saba Khan, RBC. Just a question on the program management side. I think we heard from a couple of your peers as well that this is a focus area. You guys have been doing it for a while. Is there a change how you might go to market, how you're embedding that capability into end markets? Just how do you plan to compete as some of your other larger peers are also focusing a bit on this space?

Sure. Absolutely. Shannon, do you want to take that?

Yes. So I spoke about 2 things, and I'll just foot stomp on our early advisory with PA Consulting. So when we think about just some of the challenges, whether it's the contracting model or how we're actually going to build projects with our clients, having that early advisory really does set us apart. I'll go back also to the example with Amtrak. So they're a client-side organization that has deployed capital maybe $1 billion, $2 billion a year. They're looking at multiplying that in a given year. And just being able for them to set up successfully on their side is an area that we differentiate in. And that, again, is with PA Consulting, helping them make sure that they are set up effectively to deliver that capital program. And then the other areas that we're focused on, so we keep investing in our talent bench when we develop our own internal talent. So we've been making some big investments over the last year on raising the next top-box talent that goes on that's part of our proposals in development. That's something that we've been investing in as well as our bench strength more broadly. When we have great people that are part of Jacobs that tied with our client-centric approach, they immediately get deployed on projects, and that gives us that stickiness with our customers. And then where we're focusing and we're ahead of the game on this is with Jacobs AI and our AI platform that's connecting our knowledge across all of the work that we've done. And so now we're really able to codify what was, I'll call it, more of a tribal knowledge approach to program delivery, which is fantastic. But now we're able to give those intuitive insights with our platform like [ Acuity, ] and those developments are moving at a pace that we don't see elsewhere. And I think that's going to give us long-term advantage there as well.

Steve?

I think he's got a follow-up, I think.

Just one quick follow-up. I guess just on the broader 6% to 8% organic growth assumption there. A lot of the themes you talked about seems a bit more commercial or private sector tilted around data centers, reshoring and all that. Are you expecting maybe the commercial mix or the private sector mix to maybe go up over the next 3 to 5 years? And what's may be the underlying assumption on just kind of the base-level infrastructure spend in the U.S. just outside of even programs like the IIJA?

Yes. My short answer would be is that it could, but the pie will get bigger, right? And that's the beauty of the model. Right now, it's 60-40. So it's 60% public sector, that's globally; 40% in the private sector. Could that balance out a little bit with some secular trends that we've seen? It could. It's going to be of a bigger pie because we see the growth rates in the other markets as well. One area as far as the level setting on the U.S. infrastructure spend, Patrick, maybe you want to talk a little bit about that. But keep in mind, the water sector has been funded almost exclusively in the state and -- state, local and municipality area and through user fees, too. So I don't know if you want to talk about that.

Yes, it's a good point, Bob. If I maybe just build on that and talk more broadly about what we see happening in the U.S. infrastructure market over the next sort of 4 or 5 years. I mentioned earlier a trend towards alternative delivery or more the private sector taking responsibility for delivering the projects, whether it's through design build projects or construction management, risk type projects. So more and more of the private sector will take contractual responsibility there. We do see a shift towards that, a fairly significant shift. And so with that, we see great opportunity, a, to leverage our global expertise and global delivery base; but b, it's a slightly different margin profile that we're likely to see as a result of that as well.

Go ahead, Steve.

Steve Fisher, UBS. You used, Bob, the word, and actually the whole team, differentiation a lot today. And I wanted to just get your opinion on how important you think it is to have material differentiation versus the top-tier peers in your market versus the broader market. And your answer might end up being similar examples to what you just talked about with Saba. But I'm curious, if it is really important to be very differentiated versus the top-tier peers. And from them, we all hear about advisory and program management and AI and digital vertical strength. Where do you see the most separation being established between Jacobs and the top-tier peers?

Yes. That's probably a longer answer, Steve. But I'd answer it this way. I would say our operating model, right? We don't -- we're in 40 countries globally, but we're not operating separately. We're not a global company because we're in 40 countries. We're a global company because we're connected globally rather than -- and look, we've got great competitors. So this is not a dig on our competitors. They're competitive mates. We actually partner with our competitors around the world. But it's not a franchise model, right? We're not Jacobs U.S.A, Jacobs, U.K., Jacobs Ireland. We're Jacobs in those countries. And so what Shannon showed is that cross-cutting nature of our people, but it's also a cross-cutting nature of the capabilities. Take program -- let's go back to Saba's question. Take program management, for example. We're not selling names, right? We're not selling well, Steve Fisher and Shannon Miller are going to be on that job. So therefore, we're going to win. We're selling a capability that is going to differentiate us using digital platforms as well as you go to any of these jobs that Patrick highlighted in the Middle East right now, it looks like the United Nations. I mean on the King Salman Airport in Riyadh, we literally have 5 continent -- 5 continents represented on that one job. So I'd say it's the operating model of the connectivity of the globe is the differentiated piece.

Got it. And then just a follow-up. You talked also a lot about the end-to-end solutions that you offer. How should we think about the resources that you're putting into certain parts of that end-to-end cycle, for example, the operations maintenance and the PMCM as opposed to the advisory and design -- conceptual design type part of that process.

Yes. We kind of see that rising to the needs of our clients, right? So this is not a pivot that we're going to -- we're pivoting to putting more focus on advisory and less about the balance of the asset life cycle. It's almost like all tides rising at once because that's the whole value -- that's the value proposition to our clients. And so that's kind of how we look at it.

Yes. Go ahead, Mike.

Thanks, Bert. So for each of you, what are the 1 or 2 things that in the 5-year planning cycle, give you a little more -- less confidence, what could go wrong? What are the things you're thinking about when you put this plan together because as somebody who's followed the company for more than a couple of years in the past, we've seen these plans and all of a sudden, projects get canceled, programs, geopolitics. So just a couple of thoughts in your expertise. What are some of the dynamics that might cause the plan to be a little bit more volatile? Of course, we wouldn't hope that, but how that would -- as you flow through it.

So Mike, we'll answer the question, but these are all -- everything that we're going to say, and we'll go around the horn here. I'm going to go ahead and say it right now, all of them can be mitigated. So this is -- there's no singular event. And I think we learned a lot during the pandemic. There's no singular event like a pandemic another one that will create or everything. We've kind of learned a lot of mitigation along the way. So Patrick, I don't know if you want to...

I would probably just reinforce the fact that the diversification that we have in the portfolio, like Bob mentioned the pandemic, probably like maybe someone foresaw that happening. I'm not sure I did personally, but we grew during the pandemic. So to some extent, that diversification that we have, the ability to adapt is something that I think is a real strength. If I think -- so instead of what's the key risk, maybe what's the key area that we might need to adapt to, I would say probably geopolitics is the one that we're always monitoring, and with that becomes risk and opportunity associated with that. It's just how do we adapt to those situations and how quick can we overcome any disruption.

Venk?

Yes. I mean, as a finance person, I obviously think a lot about those kinds of scenarios, and that's one of the reasons we provided a range of growth opportunities and growth possibilities. But I also want to double-click on what Patrick said. One of the true unique differentiations of our business is that no single customer accounts for more than 2.5% of our revenue. So that broad diversification gives us a lot of opportunity to be able to rebalance our portfolio and be dynamic based on what the client needs are.

So mine is going to be a little bit like Patrick's with a little bit of a twist, but it's something that we're working on day in and day out. I would say it's the geopolitical landscape, but from this respect, what's happening -- what the potential effect that it could have on the social fabric of our talent, right? And so day in and day out, as we're reacting to different things that might be coming out of the current U.S. administration, we are staying very, very close to our people along the way. Because remember, at the core of who we are, it's the heart and soul of our people that we want to make sure is uniquely tied to Jacobs. And so we're doing a lot on that front. But I would probably point to that as a risk, but also an opportunity to reinforce our culture.

I don't know that I'll add too much different from all of it, but I do think it's about how we can adapt to some of the geopolitical cycles. But I guess what I would offer is just sort of reflecting on our experience, and I just think we've learned so much as an executive leadership team, and we're deeply in our senior leadership team. And we've brought in a lot of great new talent into the more senior ranks in the organization. I feel like we have a more resilient business that really talks more often about what we've learned through previous cycles. And as a result, we've gotten to this place over the last 8 years to really optimize our portfolio. So we're -- in the private sector, we're not just focused on life sciences. We can adapt our life sciences talent to work in the semiconductor industry that now translates to AI data centers. So that's provided, I think, more resiliency in the private sector. I think another area of differentiation for us is this intersection between the mix of private sector work that we have with public sector work. The innovations that we have when we're dealing with the race to deploy in life sciences allows us to make some of these investments in augmented delivery that I think is going to reap benefits for us as we move forward in the public and municipal sector in our business. So I think that provides some resiliency as we move forward. So I guess if we had multiple geopolitical events more than a few that we have proven to adapt to, that would probably give me pause about how we would adapt to massive sort of events like that.

But we do it.

But -- absolutely. We rise to the challenge.

The joy of going last to a question like this. But I guess I'd point to 2 things, and I do believe they're mitigated. The first is I'd probably get a bit of a headache if we ran into a problem where there was a technology disruption and some of the products either didn't meet safety protocols or efficacy. But again, I think the diversity of our Infrastructure and Advanced Facilities portfolio would counterbalance such an event. My colleagues talked about geopolitics. These large investments -- our Jacobs business is global. Our customers' business are globally connected. They're buying raw materials around the world. If the geopolitics come into play and inflation becomes a sustaining pressure, I think you could see some projects that take a pause based on the size of those investments. But again, I think diversity of the portfolio probably brings a good balance for us.

So we have time for one more question, if there is one. All right. I think Bob is going to give some closing comments. And then we'll be around until 6:30 for any follow-ups you might have, and we're going to have drinks and hors d'oeuvre.

Yes, absolutely. Well, everyone, thank you again. Thank you for sticking with us for the better part of 2.5 hours. It's been a great -- we've obviously prepared a lot for this -- the release of this 5-year strategy. And so hopefully, that came through in the clarity on our growth profile moving forward. I'm not going to go through this slide, but I would end -- talked about our markets, we've talked about the convergence around our markets. We've talked about how we are absolutely doubling down on the redefining of the asset life cycle, but it does start with people. And I'll end with how I started in this team and the team that you see in front of you. We've got a strong team. I'd put our team up against anybody in the industry and beyond. And we're going to deliver on the commitments that we've made. So next slide. So challenge accepted. We've got a bold strategy in front of us. We're on top of it. And we look forward to talking to everybody during the reception. Hope you will stay with us and have maybe a beverage or two and talk to our market leaders and our staff that they're going to be floating around the sessions, too. So everyone, thank you so much, and thank you for your continued support.