• Delivered record second quarter performance
• Design book-to-burn ratio of 1.2 drove 8% total backlog growth to a record high; 22^nd consecutive quarter with a book-to-burn ratio in excess of 1
• Continued to execute returns-based capital allocation policy
• Raised earnings guidance for a second consecutive quarter

DALLAS--(BUSINESS WIRE)--May 11, 2026-- AECOM (NYSE:ACM), the trusted global infrastructure leader, today reported second quarter fiscal 2026 results.

Second Quarter Highlights:

• Reflecting as reported GAAP performance from continuing operations, second quarter revenue increased 1% to $3.8 billion, operating income declined 4% to $248 million, net income increased 19% to $184 million and diluted earnings per share increased 22% to $1.42.
• Net service revenue¹ increased 4% on an as reported basis, or 2% on a constant-currency basis, highlighted by 8% constant-currency growth in the Americas design business.
• The segment adjusted² operating margin³ increased by 50 basis points to 16.5% and the adjusted² EBITDA margin⁴ increased by 20 basis points to 16.5%, both of which set new all-time highs for a second quarter.
  • As a result, in the first half of the year, the segment adjusted operating margin and the adjusted EBITDA margin were both 16.5%, increasing by 70 basis points and 50 basis points, respectively, and set new records.
• Adjusted² EBITDA⁵ increased by 8% and adjusted² EPS increased by 27%.
• Total backlog⁶ increased by 8% to a record high, driven by a 1.2 book-to-burn⁷ ratio in the design business.
  • The design pipeline increased by double-digits and reached a record level, driven by strong funding across the Company’s markets and an expanding addressable market opportunity.

“Our strong second quarter and fiscal year-to-date performance highlights the strength and resiliency of our business,” said Troy Rudd, AECOM’s chairman and chief executive officer. “Our competitive advantages of scale, infrastructure domain and technical expertise, and strong client relationships are key to our successes. We are continuing to invest at record levels to enhance our client value proposition and expand our addressable market, which includes our proprietary AI investments and growing our Advisory practice. Taken together, we are well positioned to deliver on both our twice-raised fiscal 2026 guidance and our long-term financial targets.”

“Our teams continue to build momentum and our investments to extend our competitive advantages are contributing to a strengthened client value proposition,” said Lara Poloni, AECOM’s president. “Now more than ever, we are positioned to deliver complex technical expertise at scale.”

“As our second quarter performance and raised full year financial guidance underscore, we have an enduring competitive advantage that allows us to continue to deliver,” said Gaurav Kapoor, AECOM’s chief financial and operations officer. “Our competitive advantages have enabled us to consistently win increasingly valuable projects, and in turn, deliver continued earnings growth year after year.”

Cash Flow and Capital Allocation

• Underlying cash flow in the second quarter was consistent with expectations, but was offset by delayed payment timing in the Middle East business, as well as longer-than-anticipated claim resolution on certain projects.
• Importantly, collections in the Middle East have already recovered in the fiscal third quarter and AECOM reiterated its full year free cash flow guidance, as well as its long-term 100%+ free cash flow conversion target.
• The Company returned $155 million to shareholders through repurchases and dividends in the quarter.
  • Since the initiation of its repurchase program in September 2020, the Company has returned more than $3.5 billion of capital to shareholders.
  • The Company remains committed to executing its returns-focused capital allocation policy, which includes returning substantially all available cash flow to shareholders through repurchases and dividends.
• The Company maintains a strong balance sheet with net leverage⁹ of 1.2x.

Fiscal 2026 and Long-Term Financial Guidance

• The Company increased its fiscal 2026 earnings guidance, supported by its strong year-to-date performance, another quarter of record backlog and double-digit pipeline growth.
• As a result, the Company’s guidance now includes expectations for:
  • Adjusted² EPS of between $5.90 and $6.10, as compared to $5.85 to 6.05 previously, which now represents 14% year-over-year growth at the mid-point of the range.
  • Adjusted² EBITDA⁵ of between $1,275 million and $1,305 million, as compared to $1,270 million and $1,305 million previously, which now represents 7% year-over-year growth at the mid-point of the range.
  • Reiterated organic NSR¹ growth range of between 6% and 8%, which excludes the expected approximately 200 basis point impact of fewer working days in fiscal 2026.
  • A segment adjusted operating margin³ of 16.8% and an adjusted EBITDA margin⁴ of 17.0%.
  • Free cash flow⁸ of approximately $400 million.
  • An average fully diluted share count of 130 million, which does not include any potential future benefits from capital allocation actions not yet taken, including potential repurchases.
  • An adjusted effective tax rate of approximately 20 – 22%.
• In addition, the Company reaffirmed its long-term financial targets, which includes its expectation to deliver a 20%+ margin exit rate by fiscal 2028 and to grow adjusted² EPS at a 15%+ CAGR from fiscal 2026 to fiscal 2029.
• 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 second quarter was $2.9 billion, a 1% increase from the prior year. Net service revenue¹ in the second quarter was $1.2 billion, a 5% increase from the prior year, driven by 8% growth in the Americas design business.

Operating income increased by 5% over the prior year to $228 million and on an adjusted² basis increased by 10% to $239 million. The adjusted operating margin on net service revenue increased by 60 basis points over the prior year to 20.0%, which marked a new all-time high for a second quarter. This performance reflects a continued focus on driving operating efficiencies across the business and the high returns on the investments the Company has made and continues to make in organic growth.

Backlog in the Americas segment grew by 2% to a new record high, driven by a 1.0 book-to-burn ratio⁷. The Americas design business had a 1.1 book-to-burn ratio led by strong wins in the Transportation, Environment and Water end markets.

International

Revenue in the second quarter was $890 million, a 2% increase from the prior year. Net service revenue¹ was $754 million, a 3% decrease from the prior year, driven by declines in the Asia and Middle East markets.

Operating income decreased by 6% over the prior year to $77 million and on an adjusted² basis increased 2% to $84 million. The adjusted operating margin on net service revenue was effectively unchanged over the prior year at 11.1%. This performance includes an impact from lower revenues in certain regions due to the conflict in the Middle East, as well as continued investments in business development and strategic growth initiatives.

Backlog in the International segment grew 25% over the prior year to a new record high, driven by a 1.2 book-to-burn ratio⁷ andstrong wins in the U.K. and Middle East markets.

Tax Rate

The effective tax rate was 12.1% in the second quarter. On an adjusted² basis, the effective tax rate was 13.9%. The adjusted tax rate was derived by re-computing the quarterly effective tax rate on adjusted net income¹⁰. 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 2025. 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; government shutdowns; changes in administration or other funding directives and circumstances that cause governmental agencies to modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; long-term government contracts are subject to uncertainties related to government contract appropriations; losses under fixed-price contracts; limited control over operations 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; our capital allocation strategy, including our ability to continue payment of dividends and purchase stock; 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 inadequate 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; 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 construction businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect; risks associated with our strategic initiatives, including AI investments and potential acquisitions and divestitures; 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 EBITDA margin, 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, adjusted EBITDA margin, 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. In addition, the Company is unable to provide a reconciliation of its guidance for financial metrics excluding the Construction Management business due to uncertainties in these non-operating items as well as other adjustments to these measures.