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AECOM Tops Q2 Earnings, Misses on Revenue, Boosts 2025 View
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AECOM (ACM - Free Report) reported mixed results for second-quarter fiscal 2025, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues missed the consensus mark and decreased from the prior year, yet net service revenues (“NSR”) grew.
AECOM reported strong performance momentum in the face of global political uncertainties, raising its financial guidance for the second straight quarter. AECOM has surpassed expectations year to date, with expanded industry-leading margins and strong free cash flow growth—up 141% in the quarter and 80% fiscal year to date. These results underscore the success of high-margin market focus and operational improvements, with the company advancing toward its 17%+ margin goal and anticipating further expansion over time.
Delving Deeper Into ACM’s Q2 Results
The company reported adjusted earnings per share (EPS) of $1.25, which topped the consensus mark of $1.15 by 8.7% and increased 20% from the prior-year quarter. The strong improvement was backed by benefits received from high-returning organic growth initiatives. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Revenues of $3.77 billion declined 4% on a year-over-year basis. Yet, adjusted NSR moved up 4% to $1.87 billion.
Total backlog at the fiscal second-quarter end was $24.27 billion, up from $23.74 billion in the year-ago period. AECOM’s design backlog rose 4% to a new record high, driven by a 5% increase in contracted backlog and a solid 1.2x book-to-burn ratio in its U.S. design business. This marks the 18th consecutive quarter with a book-to-burn ratio above 1.0, reflecting sustained demand. Additionally, the company’s pipeline of opportunities reached an all-time high, with growth across both business segments.
Americas’ revenues were $2.9 billion during the reported quarter, down 5% from the prior-year quarter’s levels. Nonetheless, NSR of $1.1 billion moved up 6% year over year, backed by the growth in the design business. This increase was driven by strong performance in the United States and Canada, supported by long-term investments in infrastructure, sustainability, resilience and energy.
Adjusted operating income of $218 million was up 13% year over year. Adjusted operating margin (on an NSR basis) expanded 130 basis points (bps) year over year to a new fiscal second-quarter high of 19.4%. This growth was driven by solid organic expansion and effective execution. This rise enables further investments in AI, digital technologies and new platforms, including the Water & Environment Advisory business.
The total backlog at the fiscal second-quarter end was $17.78 billion compared with $17.38 billion a year ago.
International revenues were down 3% year over year to $875 million. Nonetheless, NSR grew 1% year over year to $742 million, given growth in the U.K. and Hong Kong.
Adjusted operating income in the segment rose 1% year over year to $82 million. Adjusted operating margin (on an NSR basis) also moved up 10 bps year over year to 11.1%. This was backed by continued strong execution and the benefits of actions to focus on high-returning opportunities across the largest geographies.
The total backlog at the end of the fiscal second quarter was $6.48 billion, up from $6.37 billion a year ago.
AECOM Capital's quarterly revenues were $0.1 million.
Operating Highlights of ACM
Adjusted segment operating profit amounted to $263 million, up 9% from the year-ago quarter. The segment’s adjusted operating margin (NSR) improved 90 bps to 16.1%. This upside was driven by high-returning organic growth.
Adjusted EBITDA rose 8% year over year to $290 million. Adjusted EBITDA margin of 16.3% also rose 90 bps year over year, backed by the company’s ongoing investments in high-margin organic growth and its continuous improvement initiatives.
Liquidity & Cash Flow of ACM
At the end of the fiscal second quarter, AECOM’s cash and cash equivalents totaled $1.6 billion, up from $1.58 billion at fiscal 2024-end. The total debt (excluding unamortized debt issuance costs) as of March 31, 2025, was $2.55 billion, up from $2.54 billion at fiscal 2024-end.
At the fiscal second-quarter end, operating cash flow increased 102% year over year to $191 million. Adjusted free cash flow also increased 141% to $178 million year over year.
ACM’s Fiscal 2025 Guidance Raised
AECOM raised its fiscal 2025 guidance for adjusted EBITDA and EPS, while reaffirming its outlook for record net service revenue, robust profitability and margins, and sustained strong cash flow conversion throughout the year.
The company still anticipates generating 5-8% organic NSR growth in fiscal 2025. It now expects adjusted EPS in the range of $5.10-$5.20 compared with the prior estimation of $$5.05-$5.20. This indicates a 14% improvement from fiscal 2024 levels on a constant-currency basis, considering the mid-point of the guidance.
AECOM expects adjusted EBITDA in the range of $1.180-$1.210 billion compared with the prior estimation of $1.175-$1.210 billion. This indicates 9% year-over-year growth at the midpoint.
Adjusted EBITDA margin is expected to be in the range of 16.1-16.3%, representing a 30 bps increase from fiscal 2024.
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 134 million, and an effective tax rate of 24%.
MasTec, Inc. (MTZ - Free Report) reported impressive results for the first quarter of 2025, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
MasTec reported a strong financial performance in the first quarter, which was marked by solid year-over-year growth in key metrics. Revenue and adjusted EBITDA both achieved mid-single-digit gains, while earnings per share (EPS) notably surpassed prior guidance. The company highlighted record consolidated backlog levels, with a particularly sharp increase—more than double—in the Pipeline Infrastructure segment since year-end.
Quanta Services Inc. (PWR - Free Report) reported solid results for the first quarter of 2025, wherein adjusted earnings and revenues beat the Zacks Consensus Estimate, respectively. Both the top and bottom lines grew year over year.
Quanta expects revenues between $26.7 and $27.2 billion (versus $26.6 billion and $27.1 billion expected earlier). The company reported revenues of $23.67 billion in 2024. The company expects adjusted EPS in the range of $10.05-$10.65 (versus earlier projection of $9.90-$10.50), representing an increase from $8.97 in 2024.
Gibraltar Industries, Inc.’s (ROCK - Free Report) first-quarter 2025 adjusted earnings topped the Zacks Consensus Estimate and grew year over year. On the other hand, net sales missed the consensus mark and tumbled year over year.
Gibraltar’s quarterly results reflect stable demand and performance in line with internal plans. Backlog increased 30% year over year to $434 million, reaching a record high. The company reported solid contributions from the Lane Supply acquisition. Gibraltar also carried out restructuring actions and completed two additional acquisitions in the Residential segment to expand its presence in the metal roofing market.
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AECOM Tops Q2 Earnings, Misses on Revenue, Boosts 2025 View
AECOM (ACM - Free Report) reported mixed results for second-quarter fiscal 2025, where earnings surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Revenues missed the consensus mark and decreased from the prior year, yet net service revenues (“NSR”) grew.
AECOM reported strong performance momentum in the face of global political uncertainties, raising its financial guidance for the second straight quarter. AECOM has surpassed expectations year to date, with expanded industry-leading margins and strong free cash flow growth—up 141% in the quarter and 80% fiscal year to date. These results underscore the success of high-margin market focus and operational improvements, with the company advancing toward its 17%+ margin goal and anticipating further expansion over time.
Delving Deeper Into ACM’s Q2 Results
The company reported adjusted earnings per share (EPS) of $1.25, which topped the consensus mark of $1.15 by 8.7% and increased 20% from the prior-year quarter. The strong improvement was backed by benefits received from high-returning organic growth initiatives. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Revenues of $3.77 billion declined 4% on a year-over-year basis. Yet, adjusted NSR moved up 4% to $1.87 billion.
Total backlog at the fiscal second-quarter end was $24.27 billion, up from $23.74 billion in the year-ago period. AECOM’s design backlog rose 4% to a new record high, driven by a 5% increase in contracted backlog and a solid 1.2x book-to-burn ratio in its U.S. design business. This marks the 18th consecutive quarter with a book-to-burn ratio above 1.0, reflecting sustained demand. Additionally, the company’s pipeline of opportunities reached an all-time high, with growth across both business segments.
AECOM Price, Consensus and EPS Surprise
AECOM price-consensus-eps-surprise-chart | AECOM Quote
ACM’s Segment Details
Americas’ revenues were $2.9 billion during the reported quarter, down 5% from the prior-year quarter’s levels. Nonetheless, NSR of $1.1 billion moved up 6% year over year, backed by the growth in the design business. This increase was driven by strong performance in the United States and Canada, supported by long-term investments in infrastructure, sustainability, resilience and energy.
Adjusted operating income of $218 million was up 13% year over year. Adjusted operating margin (on an NSR basis) expanded 130 basis points (bps) year over year to a new fiscal second-quarter high of 19.4%. This growth was driven by solid organic expansion and effective execution. This rise enables further investments in AI, digital technologies and new platforms, including the Water & Environment Advisory business.
The total backlog at the fiscal second-quarter end was $17.78 billion compared with $17.38 billion a year ago.
International revenues were down 3% year over year to $875 million. Nonetheless, NSR grew 1% year over year to $742 million, given growth in the U.K. and Hong Kong.
Adjusted operating income in the segment rose 1% year over year to $82 million. Adjusted operating margin (on an NSR basis) also moved up 10 bps year over year to 11.1%. This was backed by continued strong execution and the benefits of actions to focus on high-returning opportunities across the largest geographies.
The total backlog at the end of the fiscal second quarter was $6.48 billion, up from $6.37 billion a year ago.
AECOM Capital's quarterly revenues were $0.1 million.
Operating Highlights of ACM
Adjusted segment operating profit amounted to $263 million, up 9% from the year-ago quarter. The segment’s adjusted operating margin (NSR) improved 90 bps to 16.1%. This upside was driven by high-returning organic growth.
Adjusted EBITDA rose 8% year over year to $290 million. Adjusted EBITDA margin of 16.3% also rose 90 bps year over year, backed by the company’s ongoing investments in high-margin organic growth and its continuous improvement initiatives.
Liquidity & Cash Flow of ACM
At the end of the fiscal second quarter, AECOM’s cash and cash equivalents totaled $1.6 billion, up from $1.58 billion at fiscal 2024-end. The total debt (excluding unamortized debt issuance costs) as of March 31, 2025, was $2.55 billion, up from $2.54 billion at fiscal 2024-end.
At the fiscal second-quarter end, operating cash flow increased 102% year over year to $191 million. Adjusted free cash flow also increased 141% to $178 million year over year.
ACM’s Fiscal 2025 Guidance Raised
AECOM raised its fiscal 2025 guidance for adjusted EBITDA and EPS, while reaffirming its outlook for record net service revenue, robust profitability and margins, and sustained strong cash flow conversion throughout the year.
The company still anticipates generating 5-8% organic NSR growth in fiscal 2025. It now expects adjusted EPS in the range of $5.10-$5.20 compared with the prior estimation of $$5.05-$5.20. This indicates a 14% improvement from fiscal 2024 levels on a constant-currency basis, considering the mid-point of the guidance.
AECOM expects adjusted EBITDA in the range of $1.180-$1.210 billion compared with the prior estimation of $1.175-$1.210 billion. This indicates 9% year-over-year growth at the midpoint.
Adjusted EBITDA margin is expected to be in the range of 16.1-16.3%, representing a 30 bps increase from fiscal 2024.
The company anticipates more than 100% adjusted net income to free cash flow conversion, an average fully diluted share count of 134 million, and an effective tax rate of 24%.
ACM’s Zacks Rank & Recent Construction Releases
AECOM currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MasTec, Inc. (MTZ - Free Report) reported impressive results for the first quarter of 2025, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
MasTec reported a strong financial performance in the first quarter, which was marked by solid year-over-year growth in key metrics. Revenue and adjusted EBITDA both achieved mid-single-digit gains, while earnings per share (EPS) notably surpassed prior guidance. The company highlighted record consolidated backlog levels, with a particularly sharp increase—more than double—in the Pipeline Infrastructure segment since year-end.
Quanta Services Inc. (PWR - Free Report) reported solid results for the first quarter of 2025, wherein adjusted earnings and revenues beat the Zacks Consensus Estimate, respectively. Both the top and bottom lines grew year over year.
Quanta expects revenues between $26.7 and $27.2 billion (versus $26.6 billion and $27.1 billion expected earlier). The company reported revenues of $23.67 billion in 2024. The company expects adjusted EPS in the range of $10.05-$10.65 (versus earlier projection of $9.90-$10.50), representing an increase from $8.97 in 2024.
Gibraltar Industries, Inc.’s (ROCK - Free Report) first-quarter 2025 adjusted earnings topped the Zacks Consensus Estimate and grew year over year. On the other hand, net sales missed the consensus mark and tumbled year over year.
Gibraltar’s quarterly results reflect stable demand and performance in line with internal plans. Backlog increased 30% year over year to $434 million, reaching a record high. The company reported solid contributions from the Lane Supply acquisition. Gibraltar also carried out restructuring actions and completed two additional acquisitions in the Residential segment to expand its presence in the metal roofing market.