Jacobs Spins Off CMS, C&I to Amentum, Sharpens Focus on High-Value Solutions

TL;DR

**Jacobs' strategic spin-off of its CMS and C&I businesses is a bold move to shed lower-margin segments and double down on high-growth, digitally-driven consulting, making it a more attractive, focused play for long-term investors.**

AI Summary

Jacobs Solutions Inc. (J) reported a significant strategic shift in fiscal year 2025, completing the Reverse Morris Trust transaction on September 27, 2024, which spun off its Critical Mission Solutions (CMS) and Cyber & Intelligence (C&I) businesses into Amentum Holdings, Inc. (AMTM). This divestiture, reflected as discontinued operations, streamlines Jacobs' focus on high-value, technology-enabled solutions in water and environmental, life sciences and advanced manufacturing, and critical infrastructure. The company launched its 'Challenge Accepted' growth strategy in February 2025 to accelerate performance and drive profitable growth. Jacobs continues to leverage strategic acquisitions like a 65% stake in PA Consulting Group Limited in fiscal 2021, BlackLynx, and StreetLight to enhance its digital and advisory capabilities. The company reported an aggregate market value of common equity held by non-affiliates of approximately $14.4 billion as of March 28, 2025, with 118,749,162 shares of common stock outstanding as of November 10, 2025. Jacobs also demonstrated a commitment to sustainability, donating over $2.9 million to 2,300+ charities across 34 countries in fiscal 2025 and tracking more than 7,000 volunteer hours.

Why It Matters

This strategic divestiture of its CMS and C&I segments into Amentum (AMTM) fundamentally reshapes Jacobs' business model, allowing it to concentrate on higher-margin, digitally-enabled consulting and advisory services in critical infrastructure, advanced manufacturing, and environmental solutions. For investors, this could signal a more focused, potentially less cyclical, and higher-growth profile, but also removes a significant revenue stream. Employees in the divested units are now part of Amentum, while remaining Jacobs employees will focus on the 'Challenge Accepted' strategy. Customers will see a more specialized Jacobs, potentially benefiting from deeper expertise in its core areas, while Amentum will serve the critical mission and intelligence sectors. This move intensifies competition in the specialized consulting and engineering space, as Jacobs aims to differentiate through its digital and sustainability offerings.

Risk Assessment

Risk Level: medium — The company faces medium risk due to the significant strategic shift from the Separation Transaction, which could introduce integration challenges and impact revenue streams as the divested businesses are no longer consolidated. Geopolitical uncertainties and economic conditions, including inflation and interest rate changes, are also cited as risks that could affect project funding and client payment obligations, as detailed in the 'Forward-Looking Statements' section.

Analyst Insight

Investors should closely monitor Jacobs' execution of its 'Challenge Accepted' strategy and the performance of its remaining Infrastructure & Advanced Facilities (I&AF) and PA Consulting segments. Evaluate the impact of the Amentum spin-off on Jacobs' future revenue and profitability, and assess whether the streamlined focus translates into sustained profitable growth and increased shareholder value.

Key Numbers

• $14.4 billion — Aggregate market value of common equity held by non-affiliates (As of March 28, 2025, indicating significant market capitalization post-spin-off)
• 118,749,162 — Shares of common stock outstanding (As of November 10, 2025, reflecting the current share count)
• September 27, 2024 — Date of Separation Transaction completion (Marks the official spin-off of CMS and C&I businesses)
• 43,000 — Global team members (Reflects the company's workforce size after the spin-off)
• 65% — Stake in PA Consulting Group Limited (Acquired in fiscal 2021, a key strategic investment)
• $2.9 million — Donations to charities (In fiscal 2025, demonstrating corporate social responsibility)
• 7,000+ — Volunteer hours tracked by employees (In fiscal 2025, including nearly 4,000 STEAM volunteer hours)
• 124,084,108 — Shares of SpinCo common stock distributed (Distributed to Jacobs shareholders in the Separation Transaction)

Key Players & Entities

• Jacobs Solutions Inc. (company) — Registrant and parent company
• Amentum Holdings, Inc. (company) — SpinCo, formed from Jacobs' divested CMS and C&I businesses
• PA Consulting Group Limited (company) — Strategic acquisition, 65% stake held by Jacobs
• Critical Mission Solutions (company) — Business segment spun off to Amentum
• Cyber & Intelligence (company) — Portion of Divergent Solutions spun off to Amentum
• New York Stock Exchange (regulator) — Exchange where Jacobs' and Amentum's common stock are listed
• SEC (regulator) — Securities and Exchange Commission
• Bridges to Prosperity (company) — Non-profit partner in volunteer initiatives
• Simetrica-Jacobs (company) — Fully owned subsidiary specializing in social value research

FAQ

Risk Factors

• Integration of Acquired Businesses [medium — operational]: Jacobs has a history of growth through acquisitions, such as the 65% stake in PA Consulting. The success of these acquisitions depends on effective integration of their operations, technologies, and personnel. Failure to integrate successfully could disrupt business, impact profitability, and dilute shareholder value.
• Competition in Technology-Enabled Solutions [medium — market]: The company operates in markets requiring advanced technology and digital capabilities. Intense competition from established players and emerging firms offering similar solutions could impact market share and pricing power. Jacobs' ability to maintain a competitive edge through innovation and strategic investments is crucial.
• Environmental and Sustainability Regulations [medium — regulatory]: Jacobs' focus on water, environmental, and critical infrastructure solutions exposes it to evolving environmental regulations. Changes in these regulations, or non-compliance, could lead to increased costs, project delays, and reputational damage.
• Dependence on Key Personnel and Talent Acquisition [medium — operational]: The company relies on a global team of approximately 43,000 professionals with specialized expertise. Attracting and retaining skilled talent, particularly in areas like AI and digital solutions, is critical. A shortage of qualified personnel or high employee turnover could hinder project execution and growth.
• Impact of Strategic Transactions [high — financial]: The completion of the Reverse Morris Trust transaction, spinning off CMS and C&I businesses, represents a significant strategic shift. While intended to focus the company, such large-scale transactions carry inherent risks related to execution, market reception, and potential unforeseen liabilities or impacts on future financial performance.

Industry Context

Jacobs operates in the consulting and advisory sector, focusing on technology-enabled solutions for sustainability, critical infrastructure, and advanced manufacturing. The industry is characterized by increasing demand for digital transformation, environmental resilience, and complex project management. Key competitors range from large engineering firms to specialized digital consultancies, all vying for projects driven by global trends like urbanization and climate change.

Regulatory Implications

Jacobs' focus on water, environmental, and infrastructure projects means it is subject to a complex web of environmental, safety, and building regulations across various jurisdictions. Compliance with these regulations is critical to avoid penalties, project delays, and reputational damage. Evolving sustainability mandates and climate-related policies present both opportunities and compliance challenges.

What Investors Should Do

1. Monitor the integration and performance of PA Consulting and other strategic acquisitions.
2. Assess the impact of the 'Challenge Accepted' strategy on profitability and market share.
3. Evaluate the company's ability to navigate evolving environmental and sustainability regulations.

Key Dates

• 2024-09-27: Completion of Reverse Morris Trust Transaction — Spun off Critical Mission Solutions (CMS) and Cyber & Intelligence (C&I) businesses into Amentum Holdings, Inc. (AMTM), refocusing Jacobs on technology-enabled solutions.
• 2025-02: Launch of 'Challenge Accepted' Growth Strategy — Introduced a multi-year strategy to accelerate performance and drive profitable growth in core segments.
• 2021: Acquisition of 65% Stake in PA Consulting Group Limited — Strengthened digital and advisory capabilities, a key strategic investment for high-value solutions.

Glossary

Reverse Morris Trust Transaction

A tax-efficient corporate transaction structure used to spin off a business unit. It typically involves contributing the business to a subsidiary and then merging that subsidiary with a publicly traded company, allowing shareholders of the original company to exchange their shares for shares in the new entity. (This transaction was central to Jacobs' strategic shift in FY2025, separating its CMS and C&I businesses.)

Discontinued Operations

A classification for a company's assets and liabilities that have been or will be disposed of, and the results of operations that have been or will be terminated. (The spun-off CMS and C&I businesses are reported as discontinued operations, reflecting the strategic divestiture.)

STEAM

An acronym for Science, Technology, Engineering, Arts, and Mathematics, representing a multidisciplinary approach to education and development. (Mentioned in the context of employee volunteer hours, highlighting a focus on community engagement in these fields.)

Lifecycle Management

The process of managing a product, system, or asset from its conception, through design and development, to manufacture, service, and disposal. (Jacobs provides end-to-end capabilities across this spectrum, indicating comprehensive service offerings to clients.)

Year-Over-Year Comparison

The most significant change from the previous filing is the completion of the Reverse Morris Trust transaction in September 2024, which divested the Critical Mission Solutions and Cyber & Intelligence businesses. This strategic shift means that the current filing will focus on Jacobs' core operations in water and environmental, life sciences, advanced manufacturing, and critical infrastructure, with the divested segments reported as discontinued operations. Consequently, year-over-year comparisons of revenue and profitability will be significantly impacted by this divestiture and the company's new strategic direction.

Key Financial Figures

• $1 — hange on Which Registered Common Stock $1 par value J New York Stock Exchange S
• $0.01 — hares of SpinCo common stock, par value $0.01 per share (the "SpinCo Common Stock") b
• $1.00 — hares of Jacobs common stock, par value $1.00 per share (the "Jacobs Common Stock") w
• $2.9 million — line. In fiscal 2025, we donated over $2.9 million to 2,300+ charities across 34 countries
• $754.1 million — fiscal 2025, the Company repurcha s ed $754.1 million in shar es. Shareholder Dividends Dur
• $0.29 — al 2025, the Com pany paid dividends of $0.29 per share in the first quarter and $0.3
• $0.32 — 0.29 per share in the first quarter and $0.32 per share in the second, third and four

Filing Documents

• jec-20250926.htm (10-K) — 3271KB
• exhibit1016-jacobsexecutiv.htm (EX-10.16) — 140KB
• exhibit21-xlistofsubsidiar.htm (EX-21) — 100KB
• exhibit23q4fy2025.htm (EX-23) — 5KB
• exhibit25-amendmenttomerge.htm (EX-25) — 27KB
• exhibit311q4fy2025.htm (EX-31.1) — 10KB
• exhibit312q4fy2025.htm (EX-31.2) — 10KB
• exhibit321q4fy2025.htm (EX-32.1) — 4KB
• exhibit322q4fy2025.htm (EX-32.2) — 4KB
• jec-20250926_g1.jpg (GRAPHIC) — 75KB
• jec-20250926_g2.jpg (GRAPHIC) — 75KB
• jec-20250926_g3.jpg (GRAPHIC) — 258KB
• jec-20250926_g4.jpg (GRAPHIC) — 187KB
• jec-20250926_g5.jpg (GRAPHIC) — 54KB
• jec-20250926_g6.jpg (GRAPHIC) — 148KB
• jec-20250926_g7.jpg (GRAPHIC) — 99KB
• 0001628280-25-053316.txt ( ) — 20362KB
• jec-20250926.xsd (EX-101.SCH) — 120KB
• jec-20250926_cal.xml (EX-101.CAL) — 168KB
• jec-20250926_def.xml (EX-101.DEF) — 619KB
• jec-20250926_lab.xml (EX-101.LAB) — 1246KB
• jec-20250926_pre.xml (EX-101.PRE) — 1001KB
• jec-20250926_htm.xml (XML) — 3276KB

Business

Item 1. Business Page 4

Risk Factors

Item 1A. Risk Factors Page 16

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments Page 46 Item 1C. Cybersecurity Page 46

Properties

Item 2. Properties Page 47

Legal Proceedings

Item 3. Legal Proceedings Page 48

Mine Safety Disclosure

Item 4. Mine Safety Disclosure Page 48 Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Page 49

Selected Financial Data

Item 6. Selected Financial Data Page 50

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Page 50

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Page 69

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data Page 69

Changes in and Disagreements With Accountants On Accounting and Financial Disclosure

Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure Page 69

Controls and Procedures

Item 9A. Controls and Procedures Page 69

Other Information

Item 9B. Other Information Page 70 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Page 70 Part III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance Page 72

Executive Compensation

Item 11. Executive Compensation Page 72

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Page 72

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence Page 72

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services Page 72 Part IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules Page 74

Signatures

Signatures Page 78 Page 2 PART I

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," "target," "goal" and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make concerning the financial condition and results of operations and our expectations as to our future growth, prospects, financial outlook and business strategy, and any assumptions underlying any of the foregoing. Although such statements are based on management's current estimates and expectations and/or currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain, and you should not place undue reliance on such statements as actual results may differ materially. We caution the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, projected or implied by our forward-looking statements. Such factors include, but are not limited to: general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets and stock market volatility, instability in the banking industry, labor shortages, or the impact of a possible recession or economic downturn or changes to monetary or fiscal policies or priorities in the U.S. and the countries where we do business on our results, prospects and opportunities; competition from existing and fut

BUSINESS

Item 1. BUSINESS Guided by our values and our brand promise — Challenging today. Reinventing tomorrow – Jacobs delivers innovative solutions to address the world's most complex challenges and create lasting value for clients, communities and society. With a global team of approximately 43,000, we provide end-to-end capabilities across advanced manufacturing, cities & places, energy, environmental, life sciences, transportation and water. Our services span advisory and consulting, feasibility and planning, through to design, program delivery and lifecycle management — helping to create a more connected and sustainable world. From addressing water scarcity and aging infrastructure to access to life-saving therapies and cyber resilience, we combine creativity, agility and deep domain expertise to deliver outcomes that matter. Our integrated approach enables clients to meet urgent needs today while preparing for the opportunities of tomorrow. Over the past eight years, Jacobs has transformed into a science-based consulting and advisory leader, focused on delivering digitally enabled, resilient solutions to complex sustainability, critical infrastructure and advanced manufacturing challenges. Strategic acquisitions, including a 65% stake in PA Consulting Group Limited ("PA Consulting") in fiscal 2021, along with BlackLynx and StreetLight — have strengthened our capabilities in high-value technology-enabled solutions. Challenge accepted In February 2025, we launched Challenge Accepted , our multi-year growth strategy designed to sharpen our focus and accelerate our performance. Aligned with our long-term financial framework, this strategy positions us to drive profitable growth and deliver scalable, full lifecycle solutions across water and environmental, life sciences and advanced manufacturing, and critical infrastructure. Page 4 As global challenges like urbanization, infrastructure modernization, digital evolution and environmental resilience intensify, ou

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