• Net service revenue growth accelerated in both segments
• Adjusted EBITDA and adjusted EPS set quarterly records
• Achieved a milestone margin performance with continued expansion opportunities ahead
• Unprecedented visibility with both backlog and pipeline at all-time highs
• Increased full year financial guidance for a third consecutive quarter

DALLAS--(BUSINESS WIRE)--Aug. 4, 2025-- AECOM (NYSE: ACM), the trusted global infrastructure leader, today reported third quarter fiscal 2025 results.

“The strength of our third quarter results, which included outperformance on all key financial metrics, demonstrated the benefits of our competitive edge platform and the high returns we earn on our growth investments,” said Troy Rudd, AECOM’s chairman and chief executive officer. “Our visibility has never been stronger – driven by the secular investment megatrends of infrastructure, sustainability and resilience, and energy – and our backlog and pipeline are at record highs. Our win rates are at all-time high levels, and we are confident in continued growth in the earnings power of our business. This quarter, we also reached a major milestone by delivering a 17.1% segment adjusted operating margin, exceeding our long-term 17% target more than one year ahead of our prior expectation. Leading our industry in margins has been a hallmark of our performance over the past several years. Importantly, these margins include record investments in organic growth initiatives, such as in our advisory business and in our technical capabilities, underscoring the high returns we earn on our investments and the continued opportunity to expand margins over time.”

“No company can match what AECOM provides in scale, technical expertise and innovation, and we are well-positioned to take advantage of long-term opportunities from the multi-decade secular growth megatrends across our markets,” said Lara Poloni, AECOM’s president. “As projects become more complex and unprecedented in size and scope, our ability to provide advisory, program management, and design expertise creates an unrivaled value proposition for our clients. Our market leading position was further validated by ENR’s most recent survey that included number one rankings in mass transit, highways, bridges and remediation, which underscores the ideal position we have to capitalize on strong demand.”

“We continue to deliver on our key commitments that underpin long-term value creation, highlighted this quarter by the achievement of a margin in excess of our 17% target well ahead of the timeline we previously communicated, as well as record adjusted EBITDA and EPS,” said Gaurav Kapoor, AECOM’s chief financial and operations officer. “We also continue to convert our record earnings to cash flow at a strong rate, with year-to-date free cash flow increasing by 27% over the prior year to a new all-time high. As a result, we have returned nearly $240 million of capital to shareholders through repurchases and dividends in the year, inclusive of our most recent dividend in July, and we remain committed to maximizing value for our investors.”

Third Quarter Highlights

• Revenue increased slightly; net service revenue² increased by 6%, highlighted by 8% growth in the Company’s largest and most profitable segment, the Americas.
• Operating income increased by 29%; the segment adjusted¹ operating margin³ increased by 90 basis points to 17.1% and the adjusted¹ EBITDA margin⁵ increased by 110 basis points to 17.6%, both of which set new quarterly records.
• Net income increased by 35%; adjusted¹ EBITDA⁴ increased by 10% and adjusted¹ EPS increased by 16%.
• Free cash flow⁶ of $262 million resulted in a 27% increase in year-to-date free cash flow to $551 million, which marked a new all-time high for the first three quarters of the year.
• Total backlog⁷ increased by 5% to a record high, driven by a 1.0x book-to-burn⁸ ratio in each of the Americas and International design businesses.

• Design backlog⁷ increased by 5% to a record high, including 6% contracted backlog growth.
• The Company delivered a 19^th consecutive quarter with a book-to-burn ratio⁸ in excess of 1.0x.
• The pipeline of opportunities increased to a new record, including growth in both the Americas and International segments, as well as double-digit growth in the earliest stages of the pipeline, which is evidence of the long-term nature of the current investment cycle.

Financial Guidance

• AECOM increased its fiscal 2025 guidance for adjusted EBITDA, adjusted EPS, segment adjusted operating margin and adjusted EBITDA margin; the Company expects to deliver:

• Organic NSR² growth of 5% to 8%, consistent with prior guidance.
• Adjusted¹ EBITDA⁴ of between $1,190 million and $1,210 million, a 10% increase at the mid-point of the range.
• Adjusted¹ EPS of between $5.20 and $5.30, a 16% increase at the mid-point of the range.
• 70 basis points of both segment adjusted¹ operating margin³ and adjusted EBITDA margin⁵ expansion to 16.5% and 16.7%, respectively.
• 100%+ free cash flow⁶ conversion.

• Other assumptions incorporated into fiscal 2025 guidance:

• An average fully diluted share count of 133 million, which reflects shares repurchased to-date
• An adjusted effective tax rate of approximately 24% for the full year.

• See the Regulation G Information tables at the end of this release for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.

Business Segments

Americas

Revenue in the third quarter was $3.3 billion, a 1% increase from the prior year. Net service revenue² was $1.2 billion, an 8% increase from the prior year. This performance included continued strong growth in the U.S., as well as the seventh consecutive quarter of double-digit growth in Canada. Both markets are benefiting from strong public infrastructure investment and a strong win rate.

Operating income increased by 16% to $241 million and on an adjusted¹ basis increased by 14% to $241 million. The adjusted operating margin on net service revenue increased by 120 basis points over the prior year to 20.5%, a new quarterly high and consistent with the Company’s expectation for continued long-term margin expansion resulting from its competitive advantage. This performance includes strong execution, the benefits from high-returning organic growth investments, ongoing continuous improvement initiatives, and growth in the Company’s higher margin Advisory business.

Backlog in the Americas segment is at a record high, driven by a 1.0x book-to-burn ratio⁸.

International

Revenue in the third quarter was $901 million, a slight decline from the prior year. Net service revenue² was $759 million, a 3% increase from the prior year. Growth was driven by the U.K. and Middle East markets, which was partially offset by a decline in Australia.

Operating income and adjusted¹ operating income increased 7% and 6%, respectively, to $90 million. The adjusted operating margin on net service revenue increased by 20 basis points over the prior year to 11.9%, which reflected continued strong execution and the Company’s focus on high-returning markets and opportunities across its largest geographies.

Backlog in the International segment is at a record high, driven by a 1.0x book-to-burn ratio⁸.

Balance Sheet and Capital Allocation Update

The Company ended the quarter with a strong balance sheet, including net leverage⁹ of 0.6x. Since the initiation of its stock repurchase program in September 2020, the Company has repurchased more than $2.3 billion of stock, which represents approximately one-third of the Company’s market capitalization at the time it commenced repurchases, and has returned more than $2.7 billion of capital inclusive of dividends.

Tax Rate

The effective tax rate was 24.2% in the third quarter. On an adjusted¹⁰ basis, the effective tax rate was 27.0%. The Company continues to expect a full year adjusted tax rate of approximately 24%. The adjusted tax rate was derived by re-computing the quarterly effective tax rate on adjusted net income. The adjusted tax expense differs from the GAAP tax expense based on the taxability or deductibility and tax rate applied to each of the adjustments.

Conference Call

AECOM is hosting a conference call tomorrow at 8 a.m. Eastern Time, during which management will make a brief presentation focusing on the Company's results, strategy and operating trends, and outlook. Interested parties can listen to the conference call and view accompanying slides via webcast at https://investors.aecom.com. The webcast will be available for replay following the call.

About AECOM

AECOM (NYSE: ACM) is the global infrastructure leader, committed to delivering a better world. As a trusted professional services firm powered by deep technical abilities, we solve our clients’ complex challenges in water, environment, energy, transportation and buildings. Our teams partner with public- and private-sector clients to create innovative, sustainable and resilient solutions throughout the project lifecycle – from advisory, planning, design and engineering to program and construction management. AECOM is a Fortune 500 firm that had revenue of $16.1 billion in fiscal year 2024. Learn more at aecom.com.

Forward-Looking Statements

All statements in this communication other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, capital allocation strategy including stock repurchases, risk profile and investment strategies, and any statements regarding future economic conditions or performance, and the expected financial and operational results of AECOM. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, but are not limited to, the following: our business is cyclical and vulnerable to economic downturns and client spending reductions; potential government shutdowns, changes in administration or other funding directives and circumstances that may cause governmental agencies to modify, curtail or terminate our contracts; losses under fixed-price contracts; limited control over operations that run through our joint venture entities; liability for misconduct by our employees or consultants; changes in government laws, regulations and policies, including failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; potential high leverage and inability to service our debt and guarantees; ability to continue payment of dividends; exposure to political and economic risks in different countries, including tariffs and trade policies, geopolitical events, and conflicts; inflation, currency exchange rates and interest rate fluctuations; changes in capital markets and stock market volatility; retaining and recruiting key technical and management personnel; legal claims and litigation; inadequate insurance coverage; environmental law compliance and adequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; managing pension costs; AECOM Capital real estate development projects; cybersecurity issues, IT outages and data privacy; risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction and oil and gas businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and result in any future proceeds owed to us as part of the transactions could be lower than we expect; as well as other additional risks and factors that could cause actual results to differ materially from our forward-looking statements set forth in our reports filed with the Securities and Exchange Commission. Any forward-looking statements are made as of the date hereof. We do not intend, and undertake no obligation, to update any forward-looking statement.

Non-GAAP Financial Information

This communication contains financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company believes that non-GAAP financial measures such as adjusted EPS, adjusted EBITDA, adjusted net/operating income, segment adjusted operating margin, adjusted tax rate, net service revenue and free cash flow provide a meaningful perspective on its business results as the Company utilizes this information to evaluate and manage the business. We use adjusted operating income, adjusted net income, adjusted EBITDA and adjusted EPS to exclude the impact of certain items, such as amortization expense and taxes to aid investors in better understanding our core performance results. We use free cash flow to present the cash generated from operations after capital expenditures to maintain our business. We present net service revenue (NSR) to exclude pass-through subcontractor costs from revenue to provide investors with a better understanding of our operational performance. We present segment adjusted operating margin to reflect segment operating performance of our Americas and International segments, excluding AECOM Capital. We present adjusted tax rate to reflect the tax rate on adjusted earnings. We also use constant-currency growth rates where appropriate, which are calculated by conforming the current period results to the comparable period exchange rates.

Our non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. A reconciliation of these non-GAAP measures is found in the Regulation G Information tables at the back of this communication. The Company is unable to reconcile certain of its non-GAAP financial guidance and long-term financial targets due to uncertainties in these non-operating items as well as other adjustments to net income. The Company is unable to provide a reconciliation of its guidance for NSR to GAAP revenue because it is unable to predict with reasonable certainty its pass-through revenue.