AECOM’s second quarter was met with a positive market reaction as investors responded to improving operating margins and robust backlog growth, despite revenue coming in below Wall Street’s expectations. Management attributed performance to the company’s continued focus on high-return organic investments, expansion of its advisory and program management businesses, and a favorable mix shift in key geographic markets. CEO Troy Rudd highlighted that the company’s “record level of business development investment” and “high win rates—especially in large pursuits” supported both backlog growth and margin expansion. The quarter also benefited from a steady pipeline of infrastructure projects, particularly in the Americas, which remains the company’s most profitable region.
Is now the time to buy ACM? Find out in our full research report (it’s free).
AECOM (ACM) Q2 CY2025 Highlights:
- Revenue: $4.18 billion vs analyst estimates of $4.32 billion (flat year on year, 3.3% miss)
- Adjusted EPS: $1.34 vs analyst estimates of $1.26 (6.2% beat)
- Adjusted EBITDA: $312.8 million vs analyst estimates of $307.8 million (7.5% margin, 1.6% beat)
- Management raised its full-year Adjusted EPS guidance to $5.25 at the midpoint, a 1.9% increase
- EBITDA guidance for the full year is $1.2 billion at the midpoint, in line with analyst expectations
- Operating Margin: 7%, up from 5.5% in the same quarter last year
- Backlog: $24.59 billion at quarter end, up 5.2% year on year
- Market Capitalization: $16.01 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From AECOM’s Q2 Earnings Call
- Sabahat Khan (RBC Capital Markets) asked about the evolving U.S. market backdrop and private sector trends; CEO Troy Rudd explained greater funding clarity and continued infrastructure investment at both federal and state levels.
- Adam Samuel Bubes (Goldman Sachs) questioned the timeline for AI and automation impacts; Rudd responded that AI is already benefiting margins and will have a “material impact” over the next two to three years.
- Andrew John Wittmann (Baird) inquired whether margin gains this year were a pull-forward from future periods; Rudd clarified that current margins reflect a sustainable run-rate, not an acceleration from future years.
- Unidentified Analyst (Citi, for Andy Kaplowitz) asked about the sustainability of book-to-burn ratios above 1x; Rudd cited a robust pipeline and high win rates as evidence that these trends are repeatable.
- Sangita Jain (KeyBanc Capital Markets) followed up on AI’s intersection with offshore technical centers; Rudd emphasized that AI and global delivery teams are complementary and will both be critical to future productivity.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will be monitoring (1) the pace of advisory and program management revenue growth, (2) further expansion of operating margins as AI and technical solutions are scaled, and (3) backlog conversion into realized revenue, especially in the Americas and Middle East. We will also track management’s ability to navigate regional market fluctuations and deliver on its growth targets for new business lines.
AECOM currently trades at $120.88, up from $112.08 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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