All right, good morning, everyone. I'm Brian Gesuale, Senior Analyst at Raymond James. Welcome to our annual IIC. Delighted to have Jacobs Technology, or Jacobs here, to present their story. We have the company's CEO, Bob Pragada, and CFO, Venk Nathamuni, here to take us through. Timing is ideal. The company's done a lot of strategic activities over the last nine years, including the recent spin of CMS. So with that, I'll turn it over to you guys. Welcome. Thanks, Brian. Let everyone filter into the room here real quickly. Sure. Big audience. Yeah, it's packed house. All right, Bob, maybe take a few minutes to level set the audience here and give investors a perspective on Jacobs' history, the company's purpose, and catch everyone up on the significant transformation over the past nine years, including the recent spin-off of CMS. Sure, sure. Well, everyone, thank you for being here. I think I saw some nervous faces in the crowd when you walked in and had Jacobs Investor Day. We are not going to go through the two and a half hour, 80 slides that are Investor Day. We just thought there's some good reference points that we would use some of the slides for. Brian, longstanding company in the engineering space, started back in the 1940s. We won't go through the 70-year history, but over the course of the better part of the first 70 years of the company's history, it was an industry leader in engineering, and then got into consulting and advisory as well. Predominantly back then in the hydrocarbon space and in the pharmaceutical world, it diversified over the decades into infrastructure, into government services, into a whole variety of things. So that kind of brings you all the way up to 2016. And in 2016, still industry leader, but got a bit diluted from the perspective of we were doing a lot of things for a lot of clients in a lot of different markets and a lot of different geographies. Probably a familiar term that you've heard before. So we, for the first time in the company's history, our strategy prior to 2016 was take care of today, take care of your client, tomorrow take care of itself. Said, you know what, we probably ought to have a more focused strategy here. And so we did. And it was in kind of the focus and fix what we had. And over the course of the first three years, you'll see we divested ourselves of our energy and chemicals business, which Dr. Jacobs is probably rolling over in his grave because that was the founding platform of the business. And this is when I say the energy and chemicals business, this is the design and engineering of downstream and upstream facilities within the oil and gas sector, as well as the manufacturing facility where the engineering for pharmaceutical facilities. And then government services, traditional aerospace and defense services. So in 2016, we went through that strategy on focus and fix. And when we did that, we saw kind of the areas of the world and in the infrastructure space specifically that we were either subscale or underinvested. And that was where our attention was going to be. And the biggest piece of that was the water space globally. We did have some capabilities outside of the U.S., but we saw that this is the tailwinds that potentially were going to come in the water sector globally as a result of climate and everything else. We were underinvested there. Led to the acquisition, probably one of the largest acquisitions in the industry as well as for the company of a company called CH2M in 2017, which was an industry leader in the water space. And subsequently, right after that, we were offered by WorleyParsons to acquire our energy and chemicals business. So over the course of that period, that first 2016 and 2019, we'll focus in on now being an infrastructure and a government services player. You see the margin increase as a result. And in 2019, really started to bring up some of our digital capabilities. Flash forward to today, that business that we created back in 2016, 2017 of the infrastructure and advanced facilities business doubled in size, and the margins were growing at a faster rate than our government services space, and the government services space, as Brian you know so well, is an industry where you need to invest, and we were subscale in that space, thought it was better for that business to part ways. We went through an RMT. Anybody in the crowd that's gone through a Reverse Morris Trust, it is a painful process, but a good one was a tax-free spin, and merged that business with a private company called Amentum, and today it trades as Amentum. So you take kind of that nine-year period, we effectively divested ourselves of 80% of our revenues, invested in growth markets, specifically in the water sector, and doubled our EBITDA over that period of time, doubled our EBITDA margin over that period of time. And our market cap has gone up two and a half times. Amazing. I think some of us in the room could use your crystal ball. Trading E&C for water and then divesting right in front of DOGE by about 60 days. Yeah, I would like to say that was by design. Bob, maybe you can take us through the addressable markets here. There's handfuls and really significant addressable market that you serve. Would you maybe take us through their various growth rates and how your business is positioned and aligned to your revenue streams? Sure. So today we're tied to, we've kind of aggregated them into three main verticals. Water environmental, our life sciences and advanced manufacturing space, and then what we call critical infrastructure, which is transportation, cities and places, and energy and power. And right now, each of these are growing at rates that we haven't seen historically. Our water space right now, where we're an industry leader and it's kind of the entire life cycle of the water platform from water resources through conveyance to treatment, that business right now is expected to grow over $200 billion over the course of the next five years. And at a growth rate of, you see on the screen there, almost 8%-10% on a growth rate. As far as advanced facilities, that 8%-10%, Brian, was our growth rate in that space that's growing less than that. In advanced facilities right now, really for us, advanced facilities is made up of life sciences facilities, the semiconductor world, data centers, as well as other complex industrial manufacturing facilities, and some really nice growth rates there, so 7%-9% from a growth rate from our perspective, and then kind of the huge, it's got a big denominator of critical infrastructure, really dominated by transportation, but we're also seeing some nice growth in cities and places worldwide. When I say cities and places, these are think about giga cities that we see in the Middle East, major sports venues like the Olympics, as well as the Expo and some other time-based events, and then in energy and power. Energy and power for us, just if I could just double click on that just for a moment, is our fastest growing capability set and probably the most cross-cutting in nature across all of our end markets. So the water energy nexus that we're seeing, the power water data center nexus that we're seeing, everything that we're involved with right now has got a very critical energy and power component to it. And so that convergence of our end markets is pretty exciting. Absolutely. And I actually want to double click on a couple of the things that you mentioned. You are really attached to a bunch of kind of tectonic themes that are trending here. Let's just maybe go through and give the audience a flavor of some of the things you're doing. Start with artificial intelligence demand and maybe how Jacobs is providing solutions both at the data center and the energy level. Yeah, so maybe start with the data center component as well and while that's clicking through. We've been in this space for about 20 years, so everything from a 10 MW server room that would have been attached to a facility or to an office building, we were designing the server room environment. That has since grown, and so what was a 50 MW-150 MW data center that had kind of water cooling requirements that you could tie into a municipal water system or power requirements where you could tie into a grid, obviously with AI, that's all changing, and so that nexus that I was talking about is now turned into a gigawatt plus, and these are being driven heavily by the hyperscalers and in a pretty fast rate. That business for us was about 10% of our advanced facilities business, so it's about $150 million, and is now growing at a rate that's fast. You couldn't really see it in a $10 billion P&L. You can't see it, but it's now growing at the faster rate because of what the hyperscalers have done. Effectively what the hyperscalers have done is they have forward procured the electrical equipment, so transformers, switchgear, UPS systems, et cetera. You see, I also sit on the board of Eaton, so I see it on the other side as well. The electrical OEMs are clearly at capacity on manufacturing while the hyperscalers have stepped back and performed some real deep studies on, okay, what's the most effective way to power and cool these facilities. Oh, by the way, there's a server room that's there too. So the nature of the facility has really changed. So we're right in the middle of all of that. And then on the AI for our own use, it's something that we started three, four years ago. We've got a great partnership with Palantir where we're taking AI-based algorithms and putting proprietary software on it that's very sector-focused in order to enhance the solutions that we have for our clients. We've been in all the markets for several decades. We have a lot of data. We have a lot of data that we could utilize to optimize facilities. And so where that's showing up in the biggest way right now is in what we call, I think it's up there, Intelligent O&M. We have a platform called AquaDNA that takes chemical usage, energy usage for water treatment or wastewater treatment plants and allows for the operators to enhance the efficiency of the plant and extending the asset lifecycle. These are just some examples. Transportation analytics, we've got it going on all over. You've got a lot of things happening. I want to maybe move to the pharma space for you. I don't think a lot of people in the room are as intimate with what you're doing there. Talk about how the company is kind of on the front line of GLP-1s, neurological drug innovation, and really just a massive inflow of innovation coming in the sector overall. Sure. So maybe just I'll step back for a moment just as a fun fact. Before Dr. Jacobs founded the company back in 1947, he was actually a Merck employee and saw kind of the complex nature of these manufacturing. One of the first penicillin plants in Brooklyn was designed by Dr. Jacobs. And so that kind of carried through our DNA over the course of time. And as we got into biologics, these facilities were becoming more and more complicated. So what do we do? What we do is that when a molecule, whether it be a large molecule or small molecule, biologics or chemical synthesis, and one of our clients, tier one pharma, tier one biotech, has got the molecule to where it's ready for commercial manufacturing, we go in at that level and help our clients on envisioning what does the process look like, what do you need to do in order to commercially manufacture, and then we design the facility around that process, so that's kind of what we do. The trends we're seeing right now, and we've been in the space for, obviously, a long time, haven't seen this. So what AI, and I'll say it again, what AI is doing for our client's business on drug discovery, and it's been well publicized around that, are taking now some really, really unique either ailments or diseases and coming to a solution quicker and think complex molecule, complex facility, and a new one. And so with the case of GLP-1s, which is kind of dominating the news right now, yes, there's a lot going on with the two big players that are in that space. There are now new entrants that are coming in as well with their own molecule around GLP-1s. And then as we look forward, because there's still oncology work that's going on, there's still work going on within other ailments, the next kind of holy grail is around neurodegenerative disease or Alzheimer's. And companies like Lilly and others are getting some pretty advanced stage molecules that will need new facilities. So we see the tailwinds pretty strong. Amazing. Maybe pivot over to the environmental side and let's look out just a little ways. PFAS seems like an area that's going to be very significant and you'll play a major role in PFAS remediation. How do you think about your opportunities there and maybe lay out the timing of these things happening for you? Sure. So one thing just to clarify, because I know you hear a lot of different things about PFAS, we never saw PFAS as a vertical. You kind of heard some folks started to talk about it's a $100 billion opportunity, it's a $200 billion opportunity. We never really saw it as that. What we did see it though as a critical element for remediation in drinking water. So what it's showing up as, and even if you hear kind of the narrative right now around deregulation and what happens to standards, there are still areas of not just the U.S., but around the world where in the drinking water, you could increase the standard or increase the level, you'd still have to do the remediation work. And so we're seeing that effect, the growth rates in our water business. That's really where we're seeing it and it's got a long tail. Even if it's not identified as a microcontaminant with legislation, municipal water districts have to deal with this, and then in the private sector, companies like Dow and others have been already in the middle of it for a while. Right. Maybe that's a good chance to talk about the water business. Sounds like there's a lot of things going on. You'll weave PFAS into it. Maybe give us a sense from a regional perspective, maybe how AMP8 plays in the U.K., what you're seeing in North America and then certainly other markets and your outlook for water in general. Yeah. So the growth rates that we've seen so far, and this is kind of double digit in the P&L as well as double digit in backlog growth and double digit in pipeline growth, is global. That's happening around the world. The real driver around that is around what's happening with climate. I mean, there's several drivers, what's happening with climate and natural disasters. And that's accelerating this need to deal with clean water, but also water scarcity and in other areas of the world, floods. And the way our global head of water talks about it is we either have not enough, too much, and if we've got not enough or too much, you got to clean it because with what's happening with natural disasters, what's happening is that, and this is of all the different types of jobs we've been doing around the world, the number one focus area, number one, there's several, is around. It's not going to be an attractive term. It's called combined sewer overflows, but when you have natural disaster events, your stormwater and your waste streams start to mix and overflow without being treated. So these combined sewer overflows are really driving the business too. So you take that in the aggregate and we see some tailwinds. Right. Makes sense. There's a lot more themes we could go over, but I want to kind of pull on a thread that you brought up during your analyst day about redefining your client's asset lifecycle. Some people that didn't get to go there didn't get the full context behind that. Would you give context to what that means and how that improves your business and your customer outcomes? Yeah, absolutely. So maybe just to put it in context, but if you go back one more slide, just historically. So if you think about what our client's business is, our clients are in the business of deploying capital to transform their business and to bring business transformation. Historically, it's been done in a very linear fashion. Client knows they want to deploy capital to solve a business need, they conceptualize it, a lot of cases in the past, they would even partially design it, then you go out to an engineer to design it, and then you build it, then you commission it. And so what ended up happening is that capital decision to move forward on the what was made before engineers were getting involved. And so the only way then to get more efficient was to reduce scope. So you get the big players and we've got great competitors in our space. The big players were kind of segregated by different area. Oh, Jacobs, you do conceptual planning really well. So come do this for me and then I'm going to go to another company, I'm going to go to another company. What we've done, if you click now, Bert, what we've done is said, look, over the years, that domain knowledge we call, we're really good. So we can help you early in the process with regards to that business advisory function. And then in 2021, we made a strategic investment in a company called PA Consulting that really enhanced, they're in the same end markets that we are and really understand that kind of business advisory component. So we're getting involved in the business decision to deploy the capital. And then as that moves through in a stacked fashion, we're with the client designing along the way. And in case of the water business, we're operating and maintaining long after the asset's been built. And that's feeding into helping our clients make better decisions. So all of this is driving capital efficiency for our client. And that's really kind of been a real differentiator for us. Makes a lot of sense. I want to maybe pivot over into the financials here, talk about some of the concepts from the analyst day. You're clearly focused on organic growth. Would you maybe explain your target organic growth rates and talk about how your backlog and pipeline really instruct the view of what your growth looks like over the next several years? Yeah, thanks, Brian. I'll take that. So at a very high level, you heard Bob talk about the various cycles, the megatrends that we're right in the middle of. So we feel pretty good about our top line growth forecast of about 6%-8%. And the way that breaks down is in water and environmental, with roughly 30% of our business, we said we'll grow at high single digits. In life sciences and advanced manufacturing, again, high single digits. And then critical infrastructure, which is a combination of transportation, energy, power, and cities and places, that's more like mid-single digits growth. And then the PA Consulting business also at 6%-8%. So we feel that with those megatrends that we are right at the center of, that we can grow meaningful revenue growth in the top line. Now, in terms of how that translates into margin expansion and so forth, it's an opportunity for us to not only grow the top line in a meaningful way, but also expand margins. And we've stated our goals for expanding margins by about 320 basis points. So just for context, in fiscal 2024, we ended at about 12.8% EBITDA margin. We're now guiding for our EBITDA margin at the end of fiscal 2029 to be at 16% plus through a combination of not only driving organic growth, which gives us operating leverage, but also expanding our gross margins in a meaningful way across a multitude of factors. And happy to give more color on that as well. Yeah, I'd like to tug on that margin perspective just a little bit more. One of the things that I sense is you're really putting a lot of emphasis on your global delivery. Can you talk about how that kind of factors in from not only better outcomes for customers, but better financial model for Jacobs? Yeah, absolutely. So again, just for context here, we have a fundamental differentiation in terms of how we execute projects across the globe. So regardless of where these projects originate, we're able to implement them not only in those specific locations, but in our global delivery centers. We have about 4,000 plus employees in India and multiple locations. We have 2,000 plus employees in Poland and another 600 employees in the Philippines. These are folks which have really, really outstanding skill sets across the multitude of the markets that we serve. We're able to implement these projects in those locations such that not only are we giving our customer a 24/7 experience, but also able to deploy the skill set across these markets such that the efficiency improvements that we get, we're able to pass on those efficiencies to our clients, but also keep some of those efficiencies for ourselves. That drives a significant portion of our margin expansion story. That's something that we are doubling down on. A lot of investment that's happening in that space. We expect that to be a major contributor to our margin expansion story. I think one of the things that I thought from a soundbite perspective at the analyst day a couple of weeks ago, you said there's tangible evidence in a demand pickup at PA. And I thought that was fascinating because PA comes at such a higher margin than the core business. Can you maybe just talk a little bit about that? Because I think there's an exciting mix element that investors should appreciate here. Yeah, a great observation, Brian. I would say from a PA perspective, their margins are best in class in that industry. So an EBITDA margin starts with a two handles, it's a 20%-21% margin. And as that revenue base starts growing from what is relatively flat the last couple of years, and we see tangible evidence of it in our backlog and our pipeline, and which would manifest itself into 6%-8% growth in fiscal 2025 and beyond. So that has the dual advantage of one, providing meaningful contribution to our top line growth, but also meaningful expansion to our margins, which will also help with our margin targets of 16% plus. Perfect. And then maybe just think about free cash flow. I thought you put out some exciting targets around free cash flow margins. Maybe talk about where you're at now, where you're going, and again, some of the levers which are redundant with the margin expansion, but maybe talk about that. Yeah, a great point. I'd say one of the fundamental two North Stars for us going forward is going to be a singular focus on free cash flow and free cash flow margin. As I mentioned in the previous segment, when we talked about expanding across margins and EBITDA margin, obviously a lot of that is going to flow through directly to free cash flow margin expansion. Today, we're calling it between 7.5%-8%. We see a clear line of sight to expand the free cash flow margin to 10% plus, driven by the fact that our CapEx is going to be relatively flat at, call it 1% of revenue. And then we still have some opportunities for us to improve our DSO and DPO performance. That in conjunction with the margin expansion on EBITDA flowing through to free cash flow, we feel pretty good about a 10% plus free cash flow margin in the 2029 timeframe. A topic near and dear to everyone's heart here is returning capital to shareholders. I think you have a pretty solid plan for that. Would you talk about your targets for net leverage, where you sit today? I don't believe you've sold much, if any, of the Amentum shares through the RMT that need to be sold here in fairly short order. Then weave that in with free cash to kind of give us a complete picture of how the business looks from that perspective. Yeah, great. So first of all, I'll make the observation that we have a really fantastic balance sheet. Our net leverage ratio today as it stands is about 0.9x. And we've made a commitment to maintaining our net leverage between the range of 1- 1.5 turns. And that starts with also the ability to, as Brian alluded to, we have a stake in momentum. We publicly stated that we will disposition that stake in the first half of calendar 2025, so call it the next two, three months. And we will use that primarily to pay down debt that was part of the transaction agreement that we had with the IRS. So that's well underway and we expect to execute that in the coming months. And then in terms of capital allocation, three major pillars of how we think about capital allocation. First and foremost is investing in organic growth. You heard Bob speak about the cyclical megatrends that we're in the midst of. So we feel that there's a lot of opportunity for us to continue to focus on organic growth. And then in terms of free cash flow generation, I talked about the fact that we have a good line of sight to expanding our free cash flow margin in a meaningful way. And we are committing to returning most of that free cash flow to shareholders in the form of buybacks and dividends. Just for context, in the last 4 years, our dividends grew by 11% CAGR and our repurchases grew by about 14% CAGR, which translates to about 60% plus of our free cash flow return to shareholders. So far in fiscal 2025, we completed our Q1 at about $200 million of buyback. We said in Q2 we'll be fairly aggressive in terms of our buyback such that for the full year, we expect free cash flow return to be substantially higher than what it was last year, and the third pillar of it is obviously M&A. As you've heard, we feel really good about portfolio today in terms of how it's structured and the way it's in markets that we're targeting, so we don't feel a compelling need for us to do M&A in the short term. Longer term, we do think of M&A as an accelerant to our strategy such that we can deploy the capital for some of the cross-cutting capabilities that span multiple end markets across energy, power, water, and so forth, but that's much more of a longer term story for us. In the short to medium term, we'll focus on organic growth plus returning that cash to shareholders in the form of buybacks and dividends. Great, thank you. Bob, you've been doing this with me for several years now. So this is the annual drop the mic moment. I'm going to give you 30 seconds to kind of engage with this group in terms of why they should consider buying Jacobs as an investment with no follow-up from me. And then we'll adjourn to the breakout rooms downstairs. Brian, thanks again for having us. It's an exciting time at Jacobs. That first slide that we threw up, and you could have kind of two reactions. One is, well, this is a company that for nine years has been transforming and transforming and transforming, but while at the same time, our industry and market leadership has been growing, and that return to shareholders and shareholder return has still been and will always be highest on our list. There's not a time in my entire career, and I've been in this space for a long time, that I've seen these types of tailwinds in every end market that we're in. Sometimes there'll be one or two that are growing, another couple that are offsetting that, and then you kind of inch out some growth from there. This is the first time that in every single one of our end markets, they're in growth mode. And they're in growth mode for some very, very significant global disruptors. And Jacobs, with a science-based innovation, global delivery, as well as end-to-end solution, sits on the top of the hill in order to address that and grow. So we're really excited. You have me sold. Exciting times at Jacobs. Bob and Venk, thank you so much, and everyone, thanks for joining us. Thanks, everybody. All right.