AECOM Reports Strong First Quarter Fiscal 2026 Results, Raises Full-Year Guidance on Record Backlog and Continued Operational Momentum
AECOM , the trusted global leader in infrastructure solutions, today announced its financial results for the first quarter of fiscal year 2026. Reflecting the company’s strategic decision to retain the Construction Management business, the reported results include this segment as part of continuing operations.
First Quarter 2026 Financial Overview
For the first quarter, AECOM reported revenue of $3.83 billion, representing a 5% decline year-over-year on a GAAP basis. Operating income for the quarter was $222 million, down 7% from the same period last year, while net income decreased 21% to $140 million. Fully diluted earnings per share came in at $1.06, a 20% year-over-year decline.
On an adjusted (non-GAAP) basis, the company posted net service revenue of $1.85 billion, reflecting a 5% increase when accounting for fewer working days compared to the prior-year period. Adjusted operating income grew 10% to $264 million, while adjusted EBITDA increased 6% to $287 million. Adjusted EPS saw a modest 2% decline to $1.29, which translates to an 8% increase when adjusted for the lower tax rate in the prior-year quarter. Segment operating margins improved by 100 basis points to 16.4%, and adjusted EBITDA margin expanded by 80 basis points to 16.4%, highlighting the company’s operational efficiency and profitability enhancements.
Operational Highlights and Market Leadership
AECOM’s strong performance reflects its continued leadership in delivering high-value infrastructure projects and programs globally. The company’s backlog reached a record $25.96 billion, up 9% year-over-year, supported by a 1.5 book-to-burn ratio that underscores both immediate execution and a robust pipeline of future projects. This marked AECOM’s 21st consecutive quarter with a book-to-burn ratio above 1.0, demonstrating sustained demand and a strong project pipeline.
The Americas segment achieved 9% net service revenue growth, even amid challenges such as the unprecedented 43-day U.S. federal government shutdown, which temporarily delayed awards. The design business in the Americas maintained a book-to-burn ratio of 1.0, highlighting resilience in key markets. Internationally, the pipeline of opportunities expanded significantly, particularly in the early stages of project development, signaling strong long-term demand trends.
Strategic Investments Driving Competitive Advantage
AECOM continues to invest in AI, technology, and advisory capabilities to strengthen its competitive positioning and scale its market leadership. CEO Troy Rudd emphasized, “Our successes are built on having number one-ranked franchises across our end markets, deep technical expertise, and trusted client relationships. Investments in our Advisory and Program Management businesses, coupled with technology and AI, enable us to expand our addressable market, deliver greater client value, and create a stronger, more durable moat.”
Lara Poloni, AECOM President, added, “Clients are increasingly turning to us for their most critical and complex infrastructure projects, from our selection as preferred bidder on Scottish Water’s multi-billion-dollar investment program to being appointed Delivery Partner for the Brisbane 2032 Olympic and Paralympic Games. Our AI and technology investments have been instrumental in winning these high-profile projects and in negotiating favorable commercial models with clients.”
Strong Cash Flow and Capital Allocation
AECOM generated $70 million in operating cash flow in the quarter, with free cash flow of $42 million. The company returned over $340 million to shareholders through a combination of share repurchases and dividends. Following the quarter, the Board of Directors approved an increase in the share repurchase authorization to $1 billion. Since the inception of its repurchase program in September 2020, AECOM has returned nearly $3.4 billion to shareholders. The company maintains a strong balance sheet with net leverage of 1.0x, positioning it for continued disciplined capital allocation.
Raised Full-Year Fiscal 2026 Guidance
Reflecting strong first-quarter performance, a healthy backlog, and strategic investments, AECOM raised its fiscal 2026 guidance. Key expectations now include:
- Adjusted EPS between $5.85 and $6.05, up from prior guidance of $5.65 to $5.85.
- Adjusted EBITDA of $1.27 billion to $1.305 billion, consistent with previous expectations.
- Organic net service revenue growth of 6% to 8%, excluding the impact of fewer working days.
- Segment adjusted operating margin of 16.8% and adjusted EBITDA margin of 17.0%.
- Free cash flow of approximately $400 million.
- Adjusted effective tax rate of 20–22%.
- Average fully diluted share count of 131 million, not including potential future capital allocation actions.
AECOM also reaffirmed its long-term targets, aiming for a 20%+ margin exit rate by fiscal 2028 and a compound annual growth rate (CAGR) of 15%+ in adjusted EPS from fiscal 2026 to fiscal 2029.
Conclusion
CFO Gaurav Kapoor emphasized that AECOM’s first-quarter results, record backlog, and raised guidance reflect the company’s ability to create meaningful differentiation in the market. He noted, “Through consistent productivity improvements, strategic investments, and a strong balance sheet, we are well-positioned to continue delivering value to our clients, shareholders, and employees while sustaining growth across all our markets.”
With a robust pipeline, strong project execution, and continued investment in technology and AI, AECOM enters fiscal 2026 with confidence, poised to deliver on both near-term financial objectives and long-term strategic goals in the global infrastructure market.
