AECOM’s (ACM Quick QuoteACM - Free Report) growth prospects are gaining from the robust public infrastructure spending environment, with several federal and state initiatives across the United States backing the wave. Given the company’s expertise across diversified service offerings, it is successfully managing to capitalize on these opportunities and boost its revenue visibility in the process.

Moreover, ACM prioritizing sustainability and innovation is resonating with the clients’ priorities and global trends, further catalyzing the growth trends.

However, amid all the favorable market trends, the company faces challenges due to macroeconomic uncertainties and potential project delays, especially across government projects.

What’s Driving AECOM’s Momentum?

Global Public Spending Trends: AECOM has been witnessing robust market trends due to the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) in the United States, with public infrastructure demand reaching new heights. Recently, the company highlighted that since the launch, only about 36% of the IIJA funding has been spent across its target markets. This positioning reflects incremental long-term revenue visibility for it mainly across key market segments, including AI (with data centers taking the major share), water, transportation, aviation, coastal protection and electricity. These favorable trends are also being shared by a few key market players, including Jacobs Solutions Inc. (J Quick QuoteJ - Free Report) , EMCOR Group, Inc. (EME Quick QuoteEME - Free Report) and Quanta Services, Inc. (PWR Quick QuotePWR - Free Report) , offering substantial competition to AECOM, especially across data center projects.

Similar public spending trends are now visible in AECOM’s international markets, including the United Kingdom, Canada, the UAE and Asia. The recent 10-year infrastructure strategy announcement by the U.K. government highlights investments of GBP 725 billion across key sectors, including transportation, water and energy, reflecting heightened opportunities for the company in the upcoming term. In the Middle East, AECOM successfully managed to align its opportunities with the shifts in investment priorities for infrastructure development for the World Expo and World Cup in Saudi Arabia. With Canada’s aim of prioritizing public infrastructure projects 60% quicker, the company is positioned to capitalize on these tailwinds in the near and long term.

Favorable Long-Term Growth Positioning: Thanks to the robust initiation of government strategies regarding the enhancement of public infrastructure, alongside AECOM’s in-house capabilities, the company’s backlog is growing, in turn, increasing revenue visibility in the upcoming period. As of the third quarter of fiscal 2025, the total backlog was $24.59 billion, up 5% from $23.36 billion reported in the prior-year period. Moreover, during the first nine months of fiscal 2025, NSR grew 6% on an adjusted basis to $1.938 billion, with net service revenues (defined as revenues excluding subcontractor and other direct costs) in the Americas and International segments growing year over year by 8% and 3%, respectively.

The company’s investment strategies to enhance leadership, technical development and AI capabilities offer its substantial competitive advantage over its market peers, underpinning its ability to consistently secure large and complex projects, as indicated in its top rankings by Engineering News-Record across major markets. For the long term, AECOM aims to achieve 5-8% organic NSR growth annually, with at least 20-30 basis points of adjusted operating margin and adjusted EBITDA margin expansion.

Focus on Sustainability & Innovation: AECOM’s investments in digital water systems, predictive analytics and energy-efficient infrastructure position it as a forward-thinking leader. The adoption of digital water solutions is addressing a $70 billion market opportunity through 2030, particularly in regions like the United States and the United Kingdom, where water utilities are undergoing modernization.

Thanks to its innovative approach regarding sustainability, the company was recently selected by a major U.S. water client for a significant metering project, indicating the growing demand for accurate water management. Through a combination of strong market trends, strategic focus and operational excellence, AECOM is poised to capitalize on long-term growth drivers while maintaining its leadership in the global infrastructure space.

Risks to AECOM’s Growth

Lingering Macro Risks: AECOM operates across multiple geographies. Factors like changes in the United States’ and other national governments’ trade policies, regulatory practices, tariffs and taxes, further devaluations and other conversion restrictions and logistical & communication challenges might adversely impact the company’s financials. The ongoing uncertainties surrounding the new tariff regime are hammering the nail, and are expected to dig in deeper in the upcoming period in the form of increased costs and expenses.

In fiscal 2024, 27% of total revenues were attributable to the services provided to non-U.S. clients. The ongoing conflict between Russia and Ukraine, political and economic instability in the Middle East and Southeast Asia and currency fluctuations are posing as major threats to the company in the current environment.

Project Delays: The company derives a considerable share of its revenues from government projects, exposing it more to the adverse impacts of alterations in the government rules and regulations. Moreover, the company’s inability to renew government contracts during regulated procurement processes can materially impact operations and reduce profits & revenues going forward.

During fiscal 2024, 2023 and 2022, approximately 46%, 43% and 41%, respectively, of its total revenues were derived from contracts with government entities. Given the long-term nature of most government contracts, any budgetary changes during the tenure are expected to negatively affect AECOM’s business.

Details on the Other Market Players

Jacobs: This Texas-based provider of professional, technical and construction services is witnessing steady progress across key sectors, including Life Sciences, Data Center, Energy & Power, Water and Transportation. Jacobs has been witnessing strong growth in Water and Environmental services, driven by government-backed infrastructure projects, climate resilience initiatives and investments in aging infrastructure. At the fiscal third-quarter 2025 end, the backlog of $22.7 billion was up 14.3% on a year-over-year basis, with a book-to-bill ratio of 1.2x.

EMCOR: This Connecticut-based mechanical and electrical construction, industrial and energy infrastructure, and building services provider is massively gaining from the growing infrastructural demand across the network and communications sector, mainly in data centers. As of June 30, 2025, Remaining Performance Obligations (RPOs) were $11.91 billion, indicating 22% organic growth and 32.4% growth after including Miller Electric’s acquisition contribution, year over year. The diversity in EMCOR’s RPOs stretches across various market segments, with the networking and communications sector contributing about $3.8 billion (as of June 30), and the healthcare sector contributing $1.4 billion.

Quanta: This Texas-based infrastructure services provider’s strength lies in its ability to deliver complex, large-scale projects such as power grid modernization, solar and wind farm buildouts and next-gen telecom networks. Moreover, the recent acquisition of Dynamic Systems (DSI), LLC, strengthens Quanta’s critical path capabilities and front-end services for the growing technology, manufacturing and other load center markets. As of June 30, 2025, the company had a total backlog of $35.84 billion, with a 12-month backlog of $20.05 billion.