Jacobs Solutions (J) Economic Moat Analysis38

Moat38

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

structural advantage · 1/4 · Specialist lifecycle services and existing water operations provide a plausible basis for differentiation. However, competitive lump sum bidding and the absence of demonstrated proprietary barriers or comparative customer outcomes leave the structural advantage weakly established. Current capabilities do not by themselves prove durable economic protection.

durability · 1/4 · Ongoing asset operations support some relationship continuity, but most contracts allow client termination. Reimbursement of incurred costs and earned fees protects completed work rather than future demand. The demonstrated contractual protection is fragile; the passages do not establish how long expertise or incumbent knowledge sustains an advantage.

customer dependency · 2/4 · Operating strategic water assets and providing lifecycle management place Jacobs within important client activities, supporting dependency indirectly. Client termination rights limit legal dependence, and neither transition costs nor replacement difficulty is quantified. Operational importance is demonstrated more clearly than customer inability or unwillingness to switch.

erosion resilience · 2/4 · Third-quarter adjusted net revenue growth of 8.3% and adjusted net revenue book-to-bill above one support current commercial resilience. These observations coexist with competitive procurement and integration risks. They demonstrate continuing demand, but do not isolate market-share gains or establish resilience through a prolonged competitive or spending downturn.

Pricing power38

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

realized pricing · 1/4 · Jacobs receives no or minimal markup on defined pass-through procurement, establishing weak realized capture on that activity. This is a bounded assessment: it does not establish weak professional-service fees across the company. Reported revenue growth does not separate price, volume and mix and is not counted as pricing realization.

retention · 2/4 · Existing water operations and third-quarter adjusted net revenue book-to-bill of 1.1x, or 1.2x trailing twelve months, support continuing demand indirectly. Bookings include new business and exclude cancellations under the disclosed methodology; they do not isolate renewals. Client termination rights qualify the evidence of relationship persistence.

margin resilience · 2/4 · Cost-reimbursable contracts represented 68% of fiscal 2025 continuing-operations revenue, providing partial cost protection. Third-quarter adjusted EBITDA grew 16.7%, versus 8.3% adjusted net revenue growth. Substantial nine-month compensation charges qualify this resilience, and adjusted growth does not identify whether pricing, mix or efficiency produced the improvement.

contractual freedom · 1/4 · Competitive lump sum bids and client termination discretion constrain control over price and contract duration. Cost reimbursement and payment of earned fees upon termination provide meaningful protections, but do not demonstrate unilateral pricing authority. The disclosed arrangements support limited contractual freedom rather than an unassessable criterion.

Predictability86

5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.

Nondeclining revenue years (%)

75.00

Revenue growth volatility (pp)

15.85

Positive FCF years (%)

100.00

FCF margin volatility (pp)

1.85

observedAnnualPeriods

5.00

Financial strength57

Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.

debtFcfGrade

61.69

netDebtEbitGrade

76.82

interestCoverageGrade

44.76

currentRatioGrade

44.08

Debt / FCF (x)

3.68

Net debt / operating income (x)

1.16

Interest coverage (x)

5.92

Current ratio (x)

1.30

Capital allocation88

Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.

3-year pre-tax operating return (%)

13.05

3-year average dilution (%)

-7.65

3-year average SBC / revenue (%)

0.54

cashConversionGrade

100.00

Management50

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

capital discipline · 2/4 · Third-quarter operating cash generation of $456 million accompanied $142 million of quarterly repurchases and $614 million year to date. Completed PA ownership and substantial compensation charges show consequential allocation decisions with real costs. Cash generation supports discipline, while acquisition returns and repurchase value creation remain unproven.

incentive alignment · 2/4 · Actual ownership guidelines, disclosed compliance except for the recently appointed CFO, hedging restrictions and an adopted clawback policy support alignment. Qualifying ownership includes outstanding RSUs and requires no share purchases. Detailed performance-award design is absent, limiting assessment of whether compensation consistently rewards durable per-share value creation.

execution · 2/4 · Third-quarter adjusted net revenue growth, positive adjusted book-to-bill, operating cash generation and completed PA ownership support execution through indirect operating evidence and a completed transaction. Material compensation charges qualify the record. Expected integration benefits are not counted as delivered, and acquisition completion alone does not establish attractive returns.

governance · 2/4 · A lead independent director with oversight responsibilities, an adopted clawback policy and completed shareholder elections and advisory votes demonstrate functioning governance mechanisms. Combined chair and CEO roles concentrate authority. The catalog does not establish comprehensive current committee independence or an internal-control audit conclusion, limiting a stronger assessment.