AECOM
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.48%.
Did ACM Beat Earnings? Q2 2026 Results
AECOM posted a mixed fiscal second quarter for 2026, delivering a clean earnings beat while falling short on the top line as temporary cash flow headwinds grabbed investor attention. Adjusted EPS of $1.59 topped the $1.54 consensus by 3.50%, extending the company's streak of beating EPS estimates to four consecutive quarters, even as revenue of $3.80 billion came in 3.60% below expectations despite edging 0.8% higher year-over-year. The shortfall in operating cash flow, which collapsed to $3.80 million from $190.70 million a year ago, reflected delayed collections tied to the Middle East business and slower-than-expected claim resolutions on select projects; management was quick to note that those receivables had already begun recovering in the fiscal third quarter. Underneath the surface, net service revenue grew 4%, adjusted EBITDA rose 8% to $312.00 million, and total backlog climbed 8% to a record $26.20 billion. With shares having declined roughly 21% over the past year, the earnings beat and a second consecutive guidance raise, lifting adjusted EPS guidance to $5.90-$6.10 for fiscal 2026, may offer investors a reason to reassess the stock's valuation.
- 8% constant-currency growth in Americas design business
- Segment adjusted operating margin expansion of 50 basis points to 16.5%
- 1.2 book-to-burn ratio in the design business drove 8% total backlog growth to a record high
- Continued focus on driving operating efficiencies across the business
- Strong wins in Transportation, Environment and Water end markets
“Our strong second quarter and fiscal year-to-date performance highlights the strength and resiliency of our business. 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.”
AECOM CEO, on the earnings call
Forward Guidance & Outlook
AECOM raised its fiscal 2026 guidance for the second consecutive quarter. Adjusted EPS is now expected at $5.90–$6.10 (up from $5.85–$6.05), representing 14% year-over-year growth at the midpoint. Adjusted EBITDA guidance was raised to $1,275–$1,305 million (from $1,270–$1,305 million), representing 7% YoY growth at the midpoint. Organic NSR growth is reiterated at 6%–8%, excluding an approximately 200 basis point impact from fewer working days. Segment adjusted operating margin is expected at 16.8% and adjusted EBITDA margin at 17.0%. Free cash flow guidance of approximately $400 million was reiterated, along with a 100%+ long-term free cash flow conversion target. The company assumes an average fully diluted share count of 130 million and an adjusted effective tax rate of approximately 20%–22%. Long-term targets include a 20%+ margin exit rate by fiscal 2028 and 15%+ adjusted EPS CAGR from fiscal 2026 to fiscal 2029.
ACM YoY Financials
ACM Revenue by Segment
ACM Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.