AECOM
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +3.07%.
Did ACM Beat Earnings? Q3 2025 Results
AECOM posted a mixed but fundamentally strong fiscal third quarter, beating on earnings while falling short on the top line as profitability took center stage. Adjusted EPS came in at $1.34, clearing the $1.26 consensus estimate by 6.24%, even as revenue of $4.18 billion trailed expectations by 3.52% despite edging 0.7% higher year over year. The real story was margin execution, with the company's segment adjusted operating margin hitting 17.1% and crossing its own long-term target more than a year ahead of schedule; the Americas segment alone achieved a quarterly-high 20.5% adjusted operating margin on net service revenue, driven by robust U.S. public infrastructure spending and an eighth consecutive quarter of momentum in Canada. With only about a third of Infrastructure Investment and Jobs Act funds targeted at AECOM's markets yet spent, management sees a durable demand runway ahead. The company raised its full-year guidance for a third straight quarter, now targeting adjusted EPS of $5.20 to $5.30, representing 16% growth at the midpoint, backed by a record $24.59 billion backlog.
- Net service revenue growth accelerated in both segments, with 8% growth in the Americas and 3% in International
- Segment adjusted operating margin reached 17.1%, exceeding the long-term 17% target more than one year ahead of prior expectation
- Americas adjusted operating margin on NSR expanded 120 basis points to 20.5%, a new quarterly high
- Record investments in organic growth initiatives including advisory business and technical capabilities
- Strong U.S. public infrastructure investment and strong win rates
- Seventh consecutive quarter of double-digit growth in Canada
- U.K. and Middle East markets driving International growth
- Win rates at all-time high levels
- 19th consecutive quarter with book-to-burn ratio in excess of 1.0x
“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. 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.”
AECOM CEO, on the earnings call
Forward Guidance & Outlook
AECOM raised its fiscal 2025 guidance for a third consecutive quarter. The company now expects organic NSR growth of 5% to 8%, adjusted EBITDA of $1,190 million to $1,210 million (10% increase at midpoint), adjusted EPS of $5.20 to $5.30 (16% increase at midpoint), 70 basis points of both segment adjusted operating margin and adjusted EBITDA margin expansion to 16.5% and 16.7% respectively, and 100%+ free cash flow conversion. Guidance assumes an average fully diluted share count of 133 million and an adjusted effective tax rate of approximately 24% for the full year. Total backlog reached a record $24.6 billion with the pipeline of opportunities also at all-time highs, including double-digit growth in the earliest pipeline stages.
ACM YoY Financials
ACM Revenue by Segment
ACM Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.