ACM · Aecom

AECOM delivered record second quarter fiscal 2026 performance, with GAAP revenue up 1% to $3.8 billion and net service revenue up 4% as reported (2% constant-currency), led by 8% constant-currency growth in the Americas design business. Adjusted operating margin expanded 50 basis points to a record 16.5%, and adjusted EBITDA rose 8% to $312 million with a 20 basis point margin increase to 16.5%, reflecting operating efficiencies and returns on investments in organic growth. Americas revenue grew 1% to $2.9 billion, with NSR up 5% and adjusted operating margin hitting a second-quarter record of 20.0%, supported by a 1.0 book-to-burn ratio and strong wins in Transportation, Environment, and Water. International revenue increased 2% to $890 million, though NSR declined 3% due to Asia and Middle East softness amid regional conflict; backlog surged 25% with a 1.2 book-to-burn ratio from U.K. and Middle East wins. Total backlog reached a record $26.2 billion, up 8%, with design pipeline at record levels from robust funding. Cash flow faced headwinds from Middle East payment delays and claim resolutions, yielding $4 million operating cash flow and negative $27 million free cash flow, but collections recovered in Q3, supporting reiterated full-year $400 million FCF guidance. The company returned $155 million to shareholders, advancing its returns-based capital allocation policy, with net leverage steady at 1.2x. Management raised FY2026 guidance for the second consecutive quarter, now targeting adjusted EPS of $5.90-$6.10 (14% YoY growth at midpoint) and adjusted EBITDA of $1.275-$1.305 billion (7% growth), alongside 6-8% organic NSR growth, 16.8% segment adjusted operating margin, and 17.0% adjusted EBITDA margin. Quotes from CEO Troy Rudd, President Lara Poloni, and CFO Gaurav Kapoor emphasize competitive advantages in scale, expertise, client relationships, AI investments, and advisory expansion positioning AECOM for long-term 15%+ EPS CAGR through FY2029 and 20%+ margin exit by FY2028.