Buried within the detailed discussions of government contracts, semiconductor investments, and AI-driven business transformations in Jacobs Solutions' latest earnings call, lies a powerful signal that many analysts may have missed. The company's consistent emphasis on the burgeoning water scarcity crisis, coupled with their aggressive positioning in the water market, suggests that this sector could be the engine that drives Jacobs' future growth far beyond current projections.

While infrastructure projects like high-speed rail and chip manufacturing facilities grab headlines and billions in investment, the global water crisis is unfolding silently, threatening the very foundations of human society and economic development. Decades of unchecked population growth and unsustainable agricultural practices have depleted freshwater resources, pushing millions towards a future marked by conflict and scarcity.

Jacobs, however, is not passively observing this looming catastrophe. The company is strategically positioning itself as a leading solution provider, investing in technologies and expertise that address the complex challenges of water reuse, groundwater management, and desalination. And their latest earnings call reveals just how aggressively they are pursuing this strategy.

Bob Pragada, Jacobs' CEO, explicitly highlighted the escalating water scarcity trend across the globe, emphasizing its impact on billions of people. He pointed towards several key indicators: the adoption of direct potable reuse regulations in key U.S. states like California and Colorado, the development of regional water supply plants, and the increasing demand for reclaimed water in industries like semiconductor manufacturing.

These are not just abstract trends; they translate directly into project wins and revenue for Jacobs. The company secured a $191 million contract for a water reclamation facility in Florida, showcasing its expertise in treating and reusing wastewater for irrigation. Their work with TSMC in Arizona, designing a reclaimed water plant for their new semiconductor facility, further solidifies their position as a go-to solution provider in a water-stressed region experiencing rapid industrial growth.

Explosive Growth in Water Bookings

Beyond specific project wins, Jacobs' CEO also revealed a crucial data point: year-over-year growth in water bookings has soared by an astonishing 30%. This figure eclipses growth rates in other sectors, even those fueled by massive government spending programs like the IIJA.

The significance of this 30% growth figure cannot be overstated. It suggests that Jacobs is rapidly gaining market share in the burgeoning water solutions market, capitalizing on the urgent need for sustainable water management practices.

While the company's current guidance anticipates mid to high single-digit growth, this figure may prove to be overly conservative if the water market continues to accelerate at its current pace. If Jacobs maintains its aggressive pursuit of water projects, capturing a significant share of this growing market, their future growth could be explosive.

Here's where some back-of-the-envelope calculations offer a compelling perspective. Consider this hypothesis: if water bookings continue to grow at 30% annually for the next 5 years, and Jacobs successfully converts a significant portion of these bookings into revenue, their water segment could easily represent over 50% of their total revenue by 2029. This would dramatically alter the company's growth trajectory, potentially pushing them towards double-digit growth rates that defy current projections.

"Disclaimer: This is a simplified calculation based on a single data point. Numerous factors could influence Jacobs' future performance, including government policy shifts, technological advancements, and competitive pressures."

However, the consistent emphasis on water scarcity in their earnings calls, the rapid growth in water bookings, and their strategic positioning as a leading solution provider all point towards a compelling narrative: Jacobs is riding the crest of a wave that is set to reshape the global economy. While other companies scramble to adapt to the looming water crisis, Jacobs is already there, offering solutions and reaping the rewards. This hidden gem in their earnings call is a signal that savvy investors shouldn't ignore.

"Fun Fact: The World Bank estimates that by 2050, at least one in four people will be living in a country affected by chronic or recurring freshwater shortages."