J · 10-Q · 2026Q2 · Full report
Gross Margin Drivers
JACOBS SOLUTIONS INC. · 2026-08-04 · Importance 37 · Surprise 48 · No source text
Third-quarter gross profit increased $52.3 million, or 6.9%, to $810.7 million, but gross margin declined to 19.9% from 25.0% a year earlier. Nine-month gross profit increased $152.8 million, or 6.9%, to $2.37 billion, while gross margin declined to 21.4% from 25.0%. Margin compression was caused by a greater proportion of pass-through-cost revenue, year-over-year project mix changes and lower utilization trends, primarily in PA Consulting. I&AF operating profit nevertheless increased 14% in the quarter and 9% year to date, reaching $268.1 million and $708.1 million, respectively.
Key facts
- Consolidated gross profit for the three months ended June 26, 2026 was $810,703 thousand, an increase of $52,293 thousand, or 6.9%, from $758,410 thousand for the three months ended June 27, 2025, with gross profit margins of 19.9% and 25.0% for the respective periods source
- Consolidated gross profit for the nine months ended June 26, 2026 was $2,370,846 thousand, an increase of $152,825 thousand, or 6.9%, from $2,218,021 thousand for the nine months ended June 27, 2025, with gross profit margins of 21.4% and 25.0% for the respective periods source
- Nine months ended June 26, 2026 Obligor Group direct costs on a combined basis were $2,733,544 thousand. source
- The Company's increase in gross profit was mainly attributable to higher revenues, with margin impacts from higher revenues associated with pass-through cost, year-over-year project mix as well as lower utilization trends primarily in the PA Consulting business source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | negative | realized | -5.1% | Consolidated gross profit for the three months ended June 26, 2026 was $810,703 thousand, an increase of $52,293 thousand, or 6.9%, from… |
| operating_income | positive | realized | +3.8% | Consolidated gross profit for the nine months ended June 26, 2026 was $2,370,846 thousand, an increase of $152,825 thousand, or 6.9%, from… |
| margin | negative | realized | -3.6% | Consolidated gross profit for the nine months ended June 26, 2026 was $2,370,846 thousand, an increase of $152,825 thousand, or 6.9%, from… |
| operating_income | positive | realized | +1.3% | Consolidated gross profit for the three months ended June 26, 2026 was $810,703 thousand, an increase of $52,293 thousand, or 6.9%, from… |
| operating_income | negative | realized | — | Nine months ended June 26, 2026 Obligor Group direct costs on a combined basis were $2,733,544 thousand. |