Jacobs Solutions (J) risk factors, FY2025 10-K

Risks Related to Our Operations

1. 01We engage in a highly competitive business. If we are unable to compete effectively, we could lose market share and our business and results of operations could be negatively impacted
2. 02Our results of operations depend on the award of new contracts and the timing of the award of these contracts
3. 03Demand for our services is impacted by economic downturns, reductions in private or government spending and times of political uncertainty
4. 04Continuing inflation and high interest rates and/or construction costs could reduce the demand for our services as well as decrease our profit on our existing contracts, in particular with respect to our fixed-price contracts30% rewritten
5. 05The nature of our contracts, particularly any fixed-price contracts, subjects us to risks of cost overruns. We may experience reduced profits or losses if costs increase above budgets or estimates or the project experiences delays
6. 06Our failure to meet performance requirements or contractual schedules could adversely affect our business, financial condition and results of operations
7. 07The contracts in our backlog may be adjusted, canceled or suspended by our clients and, therefore, our backlog is not necessarily an accurate representation of our future revenues or earnings
8. 08Contracts with or funded by the U.S. federal government, other governments and their agencies pose additional risks compared to contracts with or wholly-funded by private sector clients25% rewritten
9. 09Our services expose us to significant monetary damages or even criminal violations and our insurance policies may not provide adequate coverage
10. 10The outcome of pending and future claims and litigation could have a material adverse impact on our business, financial condition, and results of operations and damage our reputation
11. 11Unavailability or cancellation of insurance coverage could increase our overall risk exposure as well as disrupt the management of our business operations
12. 12A reduction in the amount of available governmental funding could materially affect our results of operations69% rewritten
13. 13We are dependent on third parties to complete many of our contracts
14. 14Employee, agent or partner misconduct, or our overall failure to comply with laws or regulations, could weaken our ability to win contracts, which could result in reduced revenues and profits24% rewritten
15. 15Cybersecurity or privacy breaches, or systems and information technology interruption or failure could adversely impact our ability to operate or expose us to contractual penalties, significant financial losses and/or reputational harm
16. 16We may not be able to protect our intellectual property or that of our clients
17. 17We also hold licenses to third-party technology or intellectual property, which may be utilized in our business operations. If we are no longer able to license such technology or intellectual property on commercially reasonable terms or otherwise, our business and financial performance could be adversely affected
18. 18Assertions by third parties of infringement, misappropriation or other violations by us of their intellectual property rights could result in significant costs and substantially harm our business, financial condition and operation results
19. 19If we do not have adequate indemnification for our nuclear services, it could adversely affect our business, financial condition and results of operations
20. 20Our actual results could differ from the estimates and assumptions used to prepare our financial statements
21. 21Impairment of long-lived assets or restructuring activities may require us to record a significant charge to earnings
22. 22Our benefit plan expenses and obligations may fluctuate depending on various factors, including inflation, changes in levels of interest rates, changes in regulations and pension plan asset performance
23. 23Our businesses could be materially and adversely affected by events outside of our control
24. 24Our continued success is dependent upon our ability to hire, retain, and utilize qualified personnel
25. 25Remote and hybrid working arrangements may increase our costs and adversely impact our culture and our ability to effectively recruit, retain and train our personnel62% rewritten
26. 26Negotiations with labor unions and possible work actions could disrupt operations and increase labor costs and operating expenses70% rewritten
27. 27Our professional reputation and relationships are critical to our business, and any harm to our reputation or relationships could have a material adverse effect on our business, financial condition and results of operationsNew
28. 28Our focus on new growth areas for our business entails risks, including those associated with new relationships, clients, talent needs, capabilities, service and product offerings, and maintaining our collaborative culture and core values
29. 29Fluctuations in commodity prices may affect our customers’ investment decisions and therefore subject us to risks of cancellation, delays in existing work, or changes in the timing and funding of new awards
30. 30If we, or any of our subsidiaries or companies in which we have made strategic investments, lose, or experience a significant reduction in, business from one or a few large customers, it could have a material adverse impact on us
31. 31We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations50% rewritten
32. 32We maintain our cash at financial institutions, often in balances that exceed federally insured limits

Risks Related to International Operations

1. 33Our international operations are exposed to additional risks and uncertainties, including unfavorable political developments and weak foreign economies31% rewritten
2. 34political and economic unpredictability globally, and may increase the volatility of global financial markets and the global and regional economiesNew
3. 35Changes in domestic and foreign governmental laws, regulations and policies, changes in statutory tax rates and laws, and unanticipated outcomes with respect to tax audits could adversely affect our business, profitability and reputation
4. 36Foreign exchange risks may affect our ability to realize a profit from certain projects20% rewritten
5. 37Our global presence could give rise to material fluctuations in our income tax rates
6. 38We work in international locations where there are high security and compliance risks, which could result in harm to our employees or unanticipated costs39% rewritten
7. 39International trade issues, including tariffs and counter tariffs, if continued, may have a negative impact on our business generallyNew

Risks Related to Acquisitions, Investments, Joint Ventures and Divestitures

1. 40We may not achieve some or all of the expected benefits of the Separation Transaction48% rewritten
2. 41Amentum may fail to perform under various transaction agreements that were executed as part of the Separation Transaction42% rewritten
3. 42The Separation Transaction could result in a significant tax liability if the terms of the IRS private letter ruling are not satisfied
4. 43As is common in our industry, we perform certain contracts as a member of joint ventures, partnerships, and similar arrangements. This situation exposes us to a number of risks, including the risk that our partners may be unable to fulfill their obligations to us or our clients
5. 44An impairment charge on our goodwill or intangible assets could have a material adverse impact on our financial position and results of operations24% rewritten
6. 45We may engage in mergers, acquisitions, strategic investments or divestitures as part of our business strategy to accelerate our growth. These transactions present certain risks and uncertainties57% rewritten
7. 46Acquisitions, strategic investments and divestitures create various business risks and uncertainties during the pendency of the transaction
8. 47We may make minority investments that subject us to risks and uncertainties outside of our control

Risks Related to Regulatory Compliance

1. 48Past and future non-financial health, safety, security and environment-related laws and regulations could impose significant additional costs and liabilities
2. 49If we fail to comply with any governmental requirements, our business may be adversely affected
3. 50We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws

Risks Related to Sustainability and Corporate Responsibility

1. 51Climate change and related environmental issues could have a material adverse impact on our business, financial condition and results of operationsNew
2. 52Our business operations are subject to various and changing federal, state, local and foreign laws and regulations that could result in costs or sanctions that adversely affect our business and results of operationsNew
3. 53We may be unable to achieve our climate commitments and targets70% rewritten
4. 54various reporting standards within the timelines expected by stakeholders or at all, could also result in similar negative impactsNew

Risks Related to Our Indebtedness and Credit Markets

1. 55We rely in part on liquidity from our credit facilities to fund our business. Restrictions in our credit facilities and other indebtedness could adversely affect our business
2. 56Our business may be adversely affected by disruptions or lack of liquidity in the credit markets, including reduced access to credit and higher costs of obtaining credit77% rewritten
3. 57Maintaining adequate bonding, letter of credit and bank guarantee capacity is necessary for us to successfully bid on and win some contracts80% rewritten
4. 58Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase and our net income and cash flows to correspondingly decrease

Risks Related to Our Common Stock and Corporate Structure

1. 59Our quarterly results may fluctuate significantly, which could have a material negative effect on the price of our common stock
2. 60There can be no assurance that we will pay dividends on our common stock
3. 61In the event we issue stock as consideration for certain acquisitions we may make, we could dilute share ownership, and if we receive stock in connection with a divestiture, the value of stock is subject to fluctuation
4. 62Delaware law and our charter documents may impede or discourage a takeover or change of control