Jacobs Solutions Inc.: Form 10-Q for the period ended Mar 27, 2026

On March 20, 2026, as part of the consideration for the PA Consulting Transaction, the Company issued 2,043,537 shares of Company Common Stock to certain PA Shareholders in reliance on the exemption from registration provided by Section 3(a)(10) of the Securities Act, and to others in reliance on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D.

Share Repurchases

On January 30, 2025, the Company's Board of Directors authorized an incremental share repurchase program of up to $1.5 billion of the Company's common stock, to expire on January 30, 2028 (the "2025 Repurchase Authorization"). At March 27, 2026, the Company had $746.4 million remaining under the 2025 Repurchase Authorization.

An aggregate summary of repurchases of the Company’s common stock made during the second quarter of fiscal 2026 under the 2025 Share Repurchase Authorization follows:

(1) Includes commissions paid and excise tax due under the Inflation Reduction Act of 2022 and calculated at the average price per share.

Our share repurchase program does not obligate the Company to purchase any shares. Share repurchases may be executed through various means including, without limitation, accelerated share repurchases, open market transactions, privately negotiated transactions, purchases pursuant to Rule 10b5-1 plans or otherwise. The authorization for the share repurchase programs may be terminated, increased or decreased by the Company’s Board of Directors in its discretion at any time. The timing, amount and manner of share repurchases may depend upon market conditions and economic circumstances, availability of investment opportunities, the availability and costs of financing, currency fluctuations, the market price of the Company's common stock, other uses of capital and other factors.

We do not enter into derivative financial instruments for trading, speculation or other similar purposes that would expose the Company to market risk. In the normal course of business, our results of operations are exposed to risks associated with fluctuations in interest rates and currency exchange rates.

Interest Rate Risk

Please see the Note 12- Borrowings in Notes to Consolidated Financial Statements appearing under Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for a discussion of the JSI Revolving Credit Facility, 2026 Term Loan Facility and Note Purchase Agreement.

Our JSI Revolving Credit Facility, 2026 Term Loan Facility and certain other debt obligations are subject to variable rate interest which could be adversely affected by an increase in interest rates. As of March 27, 2026, we had an aggregate of $1.71 billion in outstanding borrowings under our JSI Revolving Credit Facility and 2026 Term Loan Facility. Interest on amounts borrowed under these agreements is subject to adjustment based on the Company’s Consolidated Leverage Ratio (as defined in the credit agreements governing the JSI Revolving Credit Facility and the 2026 Term Loan Facility). Depending on the Company’s Consolidated Leverage Ratio, borrowings denominated in U.S. dollars under the JSI Revolving Credit Facility bear interest at a SOFR rate plus a margin of between 0.875% and 1.625% or a base rate plus a margin of between 0% and 0.625% including applicable margins. The three-year borrowings under the 2026 Term Loan Facility will bear interest at a SOFR rate plus a margin of between 0.75% and1.50% or a base rate plus a margin of between 0% and 0.50%. The five-year borrowings under the 2026 Term Loan Facility will bear interest at a SOFR rate plus a margin of between 0.875% and 1.625% or a base rate plus a margin of between 0% and 0.625%. Additionally, our 5.90% Bonds due 2033 have interest rates subject to potential increases relating to certain ESG metrics as stipulated in the related agreements and as discussed in Note 12- Borrowings.

However, as discussed in Note 17- Commitments and Contingencies and Derivative Financial Instruments, we are party to a swap agreement with a notional value of $200.0 million to convert the variable rate interest based liabilities associated with a corresponding amount of our debt into fixed interest rate liabilities, leaving $1.51 billion in principal amount subject to variable interest rate risk.

For the six months ended March 27, 2026, our weighted average floating rate borrowings that are subject to floating rate exposure were approximately $1.21 billion. If floating interest rates had increased by 1.00%, our interest expense for the six months ended March 27, 2026 would have increased by approximately $6.1 million.

Foreign Currency Risk

In situations where the Company incurs costs in currencies other than our functional currency, we sometimes enter into foreign exchange contracts to limit our exposure to fluctuating foreign currencies. We follow the provisions of ASC 815, Derivatives and Hedging in accounting for our derivative contracts. The Company has $1.9 billion in notional value of exchange rate sensitive instruments at March 27, 2026. In addition, on January 5, 2026, in connection with the PA Consulting Transaction, the Company entered into a foreign exchange contract with a notional value of $1.31 billion with an offsetting hedge entered into on March 12, 2026 with a notional value of $60.1 million, both of which were subsequently settled before March 27, 2026 . See Note 17- Commitments and Contingencies and Derivative Financial Instruments for discussion.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), evaluated the effectiveness of the Company’s disclosure controls and procedures as defined by Rule 13a-15(e) of the Exchange Act defined above, as of March 27, 2026, the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). Based on that evaluation, the Company’s management, with the participation of the Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) concluded that the Company’s disclosure controls and procedures, as of the Evaluation Date, were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act during the quarter ended March 27, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Please refer to Item 1A- Risk Factors in our 2025 Form 10-K, which is incorporated herein by reference, for a discussion of some of the factors that have affected our business, financial condition, and results of operations in the past and which could affect us in the future. There have been no material changes to those risk factors, except for the information disclosed elsewhere in this Quarterly Report on Form 10-Q that provides factual updates to those risk factors. Before making an investment decision with respect to our common stock, you should carefully consider those risk factors, as well as the financial and business disclosures contained in this Quarterly Report on Form 10-Q and our other current and periodic reports filed with the SEC.