AECOM Announces Q3 Fiscal 2025 Financial Results
AECOM , the global leader in infrastructure consulting, reported its financial results for the third quarter of fiscal year 2025, delivering robust performance across all major financial metrics. The results underscore the company’s strategic momentum, operational discipline, and continued success in capitalizing on global infrastructure megatrends.
Strong Third Quarter Performance Highlights Strategic Execution
“The strength of our third quarter results, which included outperformance on all key financial metrics, demonstrates the growing value of our competitive edge platform and the substantial returns we continue to achieve from our strategic growth investments,” said Troy Rudd, AECOM’s chairman and chief executive officer. “With our record-setting backlog and pipeline, and win rates at an all-time high, we are experiencing unparalleled visibility into our future earnings potential. This momentum is powered by long-term megatrends—including infrastructure modernization, sustainability, resilience, and the global transition to clean energy.”
Rudd also highlighted a key performance milestone: “This quarter, we surpassed our long-term target for segment adjusted operating margin by achieving 17.1%, more than a year ahead of our original timeline. Maintaining industry-leading margins has become a hallmark of AECOM’s performance, and we’ve done so while making record investments in organic growth, including our expanding advisory business and our deepening technical capabilities.”
Strategic Differentiation Driving Industry Leadership
Lara Poloni, AECOM’s president, echoed this sentiment by underscoring the company’s unparalleled value proposition in a competitive marketplace. “No other company can match AECOM’s unique combination of scale, technical depth, and innovation. As projects grow increasingly complex and ambitious in both size and scope, our clients require the kind of integrated advisory, program management, and design solutions that only we can provide,” said Poloni.
AECOM’s position as an industry frontrunner was reaffirmed in the most recent Engineering News-Record (ENR) rankings, where the company earned top spots in mass transit, highways, bridges, and remediation services—further validating its leadership and readiness to meet the demands of a rapidly evolving global infrastructure landscape.
Financial Highlights: Record Margins, Cash Flow, and Backlog
Gaurav Kapoor, AECOM’s chief financial and operations officer, outlined the company’s record-breaking third quarter performance and its implications for long-term value creation.
“We’re proud to have exceeded our long-term segment adjusted operating margin goal well ahead of schedule, while also posting record adjusted EBITDA and earnings per share,” said Kapoor. “In parallel, we’ve translated these earnings into significant free cash flow growth, achieving a 27% year-over-year increase to $551 million for the year-to-date—setting a new all-time high for the first three quarters.”
Kapoor added that AECOM has returned nearly $240 million in capital to shareholders through share repurchases and dividends this fiscal year, including its most recent dividend paid in July. “Our financial strategy remains laser-focused on maximizing shareholder value while preserving the flexibility to invest in strategic opportunities for long-term growth.”
Third Quarter Fiscal 2025 Summary:
- Revenue: Increased slightly overall; net service revenue (NSR) grew by 6%, driven by 8% growth in the Americas—the company’s largest and most profitable business segment.
- Operating Income: Rose by 29% year-over-year, with a segment adjusted operating margin of 17.1%—a new record and 90 basis points higher than the same quarter last year.
- Adjusted EBITDA Margin: Reached a record 17.6%, up 110 basis points from the prior year.
- Net Income: Increased by 35%; adjusted EBITDA grew by 10%, and adjusted EPS rose 16%.
- Free Cash Flow: Third quarter FCF reached $262 million, contributing to $551 million in year-to-date FCF—a 27% increase from the previous year.
- Backlog: Total backlog grew by 5% to a record high. Design backlog alone also rose by 5%, with 6% growth in contracted design backlog.
- Book-to-Burn Ratio: Maintained above 1.0x for the 19th consecutive quarter, reflecting strong order intake relative to revenue recognition.
- Pipeline of Opportunities: Reached a new all-time high, with significant growth in both Americas and International markets, particularly in the early-stage pipeline—demonstrating the sustainability of current market demand.
Fiscal 2025 Outlook and Upgraded Financial Guidance
Given its strong performance and improved visibility, AECOM has raised its financial outlook for fiscal 2025:
- Adjusted EBITDA: Expected between $1.19 billion and $1.21 billion, representing a 10% increase at the midpoint.
- Adjusted EPS: Forecasted between $5.20 and $5.30, reflecting a 16% rise at the midpoint.
- Segment Adjusted Operating Margin: Anticipated to expand by 70 basis points to 16.5%.
- Adjusted EBITDA Margin: Projected to rise by 70 basis points to 16.7%.
- Free Cash Flow Conversion: Expected to exceed 100%.
Key assumptions include an average diluted share count of 133 million and an adjusted effective tax rate of approximately 24% for the full year.
Business Segment Spotlight: Americas
The Americas segment, which continues to be AECOM’s largest contributor, delivered notable results in the third quarter:
- Revenue: Reached $3.3 billion, marking a 1% year-over-year increase.
- Net Service Revenue: Rose by 8% to $1.2 billion, fueled by robust demand in the U.S. and the seventh consecutive quarter of double-digit growth in Canada.
- Operating Income: Increased by 16% to $241 million; adjusted operating margin on NSR expanded by 120 basis points to 20.5%, setting a new quarterly record.
This performance was driven by high win rates, strong execution across infrastructure programs, the maturation of high-return organic growth investments, and continued momentum in AECOM’s higher-margin advisory offerings.
Commitment to Sustainability, Innovation, and Resilience
Beyond financial performance, AECOM continues to advance its ESG goals and long-term commitments to sustainability and innovation. The company remains at the forefront of driving climate resilience, clean energy transition, and digital transformation through integrated infrastructure solutions. Recent client engagements and government initiatives in transportation, water, and energy sectors underscore the growing demand for AECOM’s technical leadership.
