Jacobs Solutions hikes dividend 12.5% on record backlog
Engineering firm raises quarterly payout to $0.36, returning $1.1bn to shareholders in fiscal 2025
Jacobs Solutions, the $16.2bn professional services firm, announced a 12.5% increase in its quarterly dividend, raising the payout from $0.32 to $0.36 per share as the company leverages record order backlog and strong cash generation. The new dividend will be paid on March 20, 2026, to shareholders of record as of February 20, 2026.
The dividend increase lifts Jacobs's annual payout to $1.44 per share, boosting the forward yield to approximately 1.06% at the current price of $135.38. The move signals management's confidence in the company's ability to generate sustainable free cash flow, coming on the heels of a fiscal year in which Jacobs returned a record $1.1bn to shareholders through share repurchases and dividends.
"We met or exceeded key metrics for fiscal 2025 and entered fiscal 2026 with multiple secular tailwinds and a record backlog, positioning us for profitable growth," said Bob Pragada, Jacobs's chair and CEO, in the company's November 20 earnings release.
Jacobs closed its fiscal 2025 with a record backlog of $23.1bn, representing a 5.6% increase from the prior year. The company achieved a book-to-bill ratio of 1.1x in the fourth quarter, indicating that new orders exceeded billings and pointing to continued revenue visibility. Gross revenue for fiscal 2025 reached $12.0bn, up 4.6% year-over-year, while adjusted net revenue rose 5.3% to $8.7bn.
Underlying profitability showed robust improvement despite headline earnings being impacted by mark-to-market fluctuations related to a previous Amentum stake. Adjusted EBITDA increased 13.9% to $1.2bn, while adjusted EPS grew 15.9% to $6.12. The company's adjusted EBITDA margin expanded to the mid-teens, reflecting operational leverage across its engineering and technical services segments.
Looking ahead, Jacobs provided fiscal 2026 guidance that anticipates adjusted net revenue growth of 6-10%, with adjusted EPS projected between $6.90 and $7.30. At the midpoint, that represents roughly 16% earnings growth. The company expects adjusted EBITDA margins to reach 14.4-14.7%, with free cash flow margins of 7.0-8.0%. Such margins would mark substantial progress toward Jacobs's longer-term financial targets.
Secular trends in infrastructure spending are driving demand across Jacobs's key end markets. The company identified Life Sciences, Data Center, Water, Energy & Power, and Transportation as the primary growth drivers for its Infrastructure & Advanced Facilities segment. PA Consulting, Jacobs's management consulting acquisition, showed accelerated revenue growth during the year, demonstrating successful integration.
Analysts maintain a broadly favorable outlook on the stock, with a consensus rating of "Buy" and an average 12-month price target of $155.93, according to market data. That target implies approximately 15% upside from current levels. Institutional investors own 91.2% of shares outstanding, reflecting confidence from large asset managers in Jacobs's strategic positioning.
The dividend increase marks the latest step in Jacobs's shareholder-friendly capital allocation strategy. Since completing its strategic transition under Pragada's leadership, the company has prioritized returning capital while investing for growth in high-margin segments. The combination of record backlog, expanding margins, and disciplined capital returns positions Jacobs as a beneficiary of increased global infrastructure spending over the coming years.
Recent contract wins announced in January 2026, including projects in low-carbon energy and water infrastructure, further reinforce the company's positioning in critical infrastructure systems. With a book-to-bill ratio above 1.0 and record order intake, Jacobs appears well-positioned to convert its backlog into revenue growth while sustaining its dividend trajectory.