Jacobs executives said on Tuesday's fiscal third-quarter 2026 earnings call that the construction market in which the company operates is generally healthy, with particularly strong demand related to key areas. These areas mainly include data centers, infrastructure, semiconductors, energy and power, transportation, and water.

CEO Bob Pragada noted that the company's continuously growing business pipeline and record backlog lay the foundation for continued growth in fiscal 2027.

"For context, as of the third quarter, revenue directly related to AI construction accounted for 11% of our adjusted net revenue, up about 100 basis points from the previous quarter, and the pipeline of future opportunities continues to grow significantly," Pragada said.

Dallas-based Jacobs' data center backlog roughly doubled, while the opportunity pipeline tripled, Pragada revealed during the analyst Q&A session. Previously, market visibility of six to nine months has now extended to two to three years, but he also emphasized that Jacobs remains selective about which projects it actually takes on.

"The pipeline visibility we have now extends to two to three years," Pragada said. "We are being selective because there are also a large number of speculative projects in the market."

Jacobs also noted that capital expenditures, while uneven, are resilient, with private sector and utility clients directing more funds toward high-growth construction market segments.

Segment Performance

Net revenue in the Life Sciences and Advanced Manufacturing segment grew 24% year over year, the fastest pace since Jacobs began disclosing results by end market in late 2024, said CFO Venk Nathamuni. Data center and semiconductor facility construction were the main drivers of this growth.

Net revenue in the Critical Infrastructure segment grew 9%, driven mainly by transportation and energy and power businesses. Nathamuni expects this business to grow at a mid-to-high single-digit rate in the medium term.

The Water and Environment business was the main weak spot, growing just over 1%, with the environmental business continuing to face year-over-year pressure. However, executives said recent contract wins from public and private sectors should begin generating revenue in the fourth quarter.

Analysts pressed management on whether the accelerated growth in the Advanced Manufacturing segment can continue into fiscal 2027. Pragada responded that the business can sustain double-digit growth because Jacobs serves the broader data center ecosystem, including chip manufacturing and the water and power infrastructure these facilities require.

"For us right now, this is a growth engine that is both deep and broad," Pragada said.

Jacobs expects bookings to remain strong as contracts for large projects move into the backlog. When asked whether U.S. semiconductor construction activity is accelerating, Pragada said clients are urging Jacobs to speed up facility design progress, and the company's pipeline continues to expand as it heads into fiscal 2027.

Pragada's brief answer was: "Absolutely."

Key Figures

For the quarter ended June 26, the company's revenue reached $4.08 billion, up 35% from $3.03 billion in the same period last year.

Backlog grew 27% to a record $28.9 billion. Despite revenue and backlog growth, profit declined. Net income was $136.6 million, down 24% from $179.6 million in the same period last year.

The company attributed the profit decline to the acquisition of PA Consulting, a London-based management consulting firm, completed in January. Jacobs said the transaction resulted in a temporary increase in the tax rate.