Aecom (ACM) Earnings Date & Reports
Aecom is one of the largest global providers of advisory, design, and engineering services... Show more
ACM is expected to report earnings to fall 4.40% to $1.52 per share on August 10
AECOM (ACM) Q2 Fiscal 2026 Earnings Recap: Record Backlog Powers Margin Gains
Key Takeaways
- AECOM reported Q2 fiscal 2026 revenue of $3.8 billion, up 1% year-over-year, with net service revenue (NSR, a key measure of core design and consulting revenue) at $1.95 billion, up 2% on a constant-currency basis.
- Adjusted EPS rose 27% to $1.59, beating consensus estimates around $1.54-$1.57, driven by record Q2 adjusted EBITDA margins of 16.5%.
- Total backlog hit a record $26.2 billion, up 8% year-over-year, supported by a design book-to-burn ratio of 1.2 (the ratio of new design bookings to revenue burned from backlog).
- Company raised FY2026 adjusted EPS guidance to $5.90-$6.10 from $5.85-$6.05, implying ~14% growth at the midpoint.
- Americas design NSR grew 8%, with segment adjusted operating margins expanding 60 basis points to 20.0%.
- Returned $155 million to shareholders via repurchases and dividends in the quarter.
Earnings Context and Why It Matters
AECOM, a global leader in infrastructure consulting, design, and engineering, operates with a fiscal year ending September 30. The Q2 fiscal 2026 results (ended March 31, 2026) are pivotal amid strong demand for transportation, water, energy, and environmental projects fueled by government spending like the U.S. Infrastructure Investment and Jobs Act (IIJA). Recent quarters showed resilient backlog growth despite international softness, but investors watch margin expansion from higher-value design work versus lower-margin construction management. This report underscores AECOM's strategic shift to high-margin services, backlog visibility, and ability to beat expectations, influencing valuation in a sector sensitive to public budgets and economic cycles.
AECOM delivered strong profitability in Q2 fiscal 2026 despite modest revenue growth. Revenue reached $3.8 billion, up 1% from the prior year, while NSR—a focus metric excluding pass-through construction costs—grew to $1.95 billion, up 4% as reported or 2% constant-currency. This slightly missed some NSR estimates near $1.96 billion but reflected 8% Americas design growth offsetting international declines.
Profitability shone: GAAP net income rose 19% to $184 million, with diluted EPS up 22% to $1.42. Adjusted EPS of $1.59 (up 27%) exceeded consensus of ~$1.55, fueled by adjusted EBITDA of $312 million (up 8%) and record Q2 margins of 16.5% (up 20-50 basis points). Segment adjusted operating margins hit 16.5%, with Americas at a Q2-high 20.0%.
Backlog expanded to a record $26.2 billion (up 8%), with 22 straight quarters of book-to-burn above 1.0. Cash flow softened (operating $4 million), but net leverage stayed low at 1.2x. Management raised FY2026 guidance: adjusted EPS to $5.90-$6.10, EBITDA to $1.275-$1.305 billion, organic NSR growth 6-8%, and free cash flow ~$400 million.
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Market Reaction and Investor Sentiment
Post-release on May 11, 2026, after market close, AECOM shares rallied in after-hours trading, reflecting investor approval of the EPS beat, record backlog, and raised guidance despite the slight NSR miss. Sentiment heading into earnings was cautious after recent stock weakness (down ~38% in six months per prior analysis), but results highlighted operational leverage and visibility, boosting confidence in margin trends and backlog conversion.
Forward Outlook and Key Factors to Monitor
AECOM's raised FY2026 guidance signals confidence in delivering 14% adjusted EPS growth at the midpoint, supported by 6-8% organic NSR expansion and 17.0% EBITDA margins. Long-term targets remain intact: 20%+ segment margins by FY2028 exit and 15%+ EPS CAGR through FY2029.
Investors should track backlog conversion, with the 1.2 design book-to-burn providing multi-year visibility. Americas strength (8% NSR growth) contrasts international softness (down 3%), so monitor demand recovery in Asia and the Middle East amid geopolitical risks.
Margin drivers include shifting to high-value design (vs. pass-through construction) and operational efficiencies. Free cash flow guidance of ~$400 million supports ongoing $155 million quarterly shareholder returns. Upcoming catalysts: Q3 earnings in August, IIJA fund deployments, and potential M&A (mergers and acquisitions) using low-leverage balance sheet.
Broader dynamics like U.S. elections, interest rates affecting infrastructure funding, and cost inflation will influence execution. Balanced growth in transportation, water, and energy sectors remains key.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
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General Information
a provider of planning, consulting, architectural and engineering design, and program and construction management services
Industry EngineeringConstruction