AECOM’s fourth quarter results reflected resilience in a challenging environment, as the company achieved a higher-than-expected profit margin and exceeded Wall Street’s revenue estimates despite a year-over-year sales decline. Management attributed performance to robust backlog growth, effective execution in its Americas segment, and strong demand for specialized services. CEO Troy Rudd highlighted the company’s ability to maintain segment operating margins and secure large-scale wins, such as the Brisbane 2032 Olympic Games partnership, even amid disruptions like the U.S. federal government shutdown.
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AECOM (ACM) Q4 CY2025 Highlights:
- Revenue: $3.83 billion vs analyst estimates of $3.74 billion (4.6% year-on-year decline, 2.5% beat)
- Adjusted EPS: $1.29 vs analyst estimates of $1.16 (10.9% beat)
- Adjusted EBITDA: $286.8 million vs analyst estimates of $265.9 million (7.5% margin, 7.9% beat)
- Management raised its full-year Adjusted EPS guidance to $5.95 at the midpoint, a 3.5% increase
- EBITDA guidance for the full year is $1.29 billion at the midpoint, above analyst estimates of $1.21 billion
- Operating Margin: 5.8%, in line with the same quarter last year
- Backlog: $25.96 billion at quarter end, up 8.7% year on year
- Market Capitalization: $11.42 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 Q4 Earnings Call
- Sabahat Khan (RBC Capital Markets) asked about the strategic decision to keep the construction management business. CEO Troy Rudd said the choice was driven by its strong backlog and new opportunities through closer integration with other AECOM divisions.
- Andrew Kaplowitz (Citigroup) inquired whether AI adoption could reduce revenue or shift the business model. Rudd responded that clients are willing to pay for added value, and AI will enhance—not replace—AECOM’s services, supporting productivity gains.
- Adam Bubes (Goldman Sachs) asked about AI integration milestones. CFO Gaurav Kapoor explained that the integration is ahead of schedule, focusing initially on the facilities market, and that employee profitability metrics will be key indicators of progress.
- Jamie Cook (Trust Securities) questioned whether clients are renegotiating contracts due to AI. Rudd clarified that clients are instead seeking more value through innovative contracting, such as moving from cost-plus to fixed-fee models.
- Judah Aronovitz (UBS) sought clarity on international backlog strength and margin trends. Kapoor noted that international backlog growth is broad-based and that margin expansion is expected as investments in technology scale.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will monitor (1) the pace of AI technology adoption and its impact on project delivery and margins, (2) the conversion of record backlog into revenue—particularly in key international markets, and (3) the effectiveness of integrating construction management with advisory and program management services. The trajectory of U.S. federal infrastructure funding and new contract structures will also remain critical indicators.
AECOM currently trades at $88.99, down from $102.70 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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