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AECOM Stock Up as Q2 Earnings Beat Estimates, Backlog Increases Y/Y
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Key Takeaways
AECOM beat Q2 EPS and NSR estimates as backlog climbed 8% year over year to $26.2 billion.
ACM raised FY26 EPS and EBITDA guidance after delivering record margins and pipeline growth.
AECOM posted its 22nd straight quarter with a book-to-burn ratio above 1.0.
AECOM (ACM - Free Report) reported better-than-expected results for second-quarter fiscal 2026, where both earnings and net service revenues (“NSR”) surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. Revenues also improved from the prior-year quarter.
Shares of this global infrastructure leader gained 1.4% in yesterday’s after-hours trading session. Positive investor sentiments were witnessed as the company raised its adjusted EBITDA and adjusted earnings forecast for fiscal 2026.
AECOM delivered a record second-quarter performance, supported by strong execution, expanding margins and continued backlog growth. The company’s design pipeline reached another all-time high. Management noted that investments in AI capabilities and the higher-margin Advisory business continue to strengthen the company’s competitive positioning and support long-term growth opportunities.
Delving Deeper Into ACM’s Q2 Results
The company reported adjusted earnings per share (EPS) of $1.59, which topped the consensus mark of $1.58 by 0.6% and increased 27% from the prior-year quarter.
Revenues of $3.80 billion grew 1% year over year. NSR of $1.95 billion surpassed the consensus mark of $1.93 billion by 1.2% and increased 4% year over year.
Total backlog at the fiscal second-quarter end was $26.20 billion, up 8% from the year-ago period. AECOM’s design business delivered a solid 1.2x book-to-burn ratio. This marks the 22nd consecutive quarter with a book-to-burn ratio above 1.0, reflecting sustained demand. Additionally, the company’s design pipeline increased double digits and reached a record level. This growth is being driven by strong funding across the company’s major markets and an expanding addressable market opportunity.
ACM’s Segment Details
Americas’ revenues were $2.91 billion during the reported quarter, up 1% from the prior-year quarter’s levels. NSR of $1.19 billion moved up 5% year over year, driven by 8% growth in the Americas design business.
Adjusted operating income of $239 million was up 10% year over year. Adjusted operating margin (on an NSR basis) expanded 60 basis points (bps) year over year to a new high of 20%. This growth was driven by continued focus on operational efficiencies and strong returns on investments supporting organic growth initiatives.
The total backlog at the end of the fiscal second quarter increased 2% year over year to a record high, supported by a 1.1x book-to-burn ratio in the Americas design business.
International revenues rose 2% year over year to $890 million. However, NSR declined 3% year over year to $754 million due to lower activity in the Asia and Middle East markets.
Adjusted operating income in the segment increased 2% year over year to $84 million. Adjusted operating margin (on an NSR basis) remained broadly unchanged year over year at 11.1%. The performance reflected lower revenues in certain regions related to the Middle East conflict, partly offset by continued investments in strategic growth initiatives.
The total backlog at the end of the fiscal second quarter surged 25% year over year to a new record high, supported by strong wins in the United Kingdom and Middle East markets.
AECOM Capital reported an operating loss of $1.5 million during the period.
Operating Highlights of ACM
Adjusted segment operating profit amounted to $322 million, up 7% from the year-ago quarter. The segment’s adjusted operating margin improved 50 bps to 16.5%.
Adjusted EBITDA rose 8% year over year to $312 million. Adjusted EBITDA margin of 16.5% also rose 20 bps year over year.
Liquidity & Cash Flow of ACM
At the end of the fiscal second quarter, AECOM’s cash and cash equivalents totaled $1.03 billion, down from $1.59 billion at fiscal 2025-end. The total debt (excluding unamortized debt issuance costs) as of March 31, 2026, was $2.75 billion compared with $2.74 billion at Sept. 30, 2025.
At the fiscal second-quarter end, operating cash flow decreased 98% year over year to $3.8 million. Free cash flow was negative $27.4 million against the positive free cash flow of $178.4 million a year ago. Management attributed the decline primarily to delayed payment timing in the Middle East business and slower claims resolution on certain projects.
ACM Raises FY26 Guidance
AECOM raised its fiscal 2026 adjusted EBITDA and EPS guidance, supported by strong year-to-date execution, record backlog and sustained pipeline growth.
It is now expecting adjusted EPS in the range of $5.90-$6.10 compared with the prior expectation of $5.85-$6.05. This indicates 14% year-over-year growth at the midpoint of the guidance.
AECOM expects adjusted EBITDA in the range of $1.275-$1.305 billion compared with the previous expectation of $1.270-$1.305 billion. This indicates 7% year-over-year growth at the midpoint.
Free cash flow is still expected to be approximately $400 million. ACM also reaffirmed its expectation for organic NSR growth in the range of 6-8%, along with a segment-adjusted operating margin of 16.8% and adjusted EBITDA margin of 17%.
ACM Reaffirms Long-Term Targets
AECOM reaffirmed its long-term financial targets, including achieving more than 20% margin exit rate by fiscal 2028 and delivering adjusted EPS growth over 15% CAGR from fiscal 2026 through fiscal 2029. Management noted that continued investments in AI capabilities, Advisory services and operational efficiencies are expected to support these long-term objectives.
Vulcan Materials Company (VMC - Free Report) posted exceptional first-quarter 2026 results with adjusted earnings and total revenues beating the Zacks Consensus Estimate and increasing year over year. The quarter’s results reflect benefits realized from the aggregates-led business and consistent focus on its strategic disciplines. Besides, efforts to incorporate top-tier innovation and technology advancements also aided the quarter’s financial performance.
Vulcan reiterated its full-year adjusted EBITDA outlook of $2.4-$2.6 billion and cited a healthy backlog supported by large projects and public construction activity.
EMCOR Group, Inc. (EME - Free Report) reported impressive first-quarter 2026 results, with earnings and revenues topping the Zacks Consensus Estimate and increasing year over year on strong demand across its core markets.
The company’s quarterly results reflect continued momentum across key end markets and customers’ confidence in its ability to execute complex and mission-critical projects. Strong activity in sectors like Network and Communications, Institutional, Healthcare, and Water and Wastewater supported growth and drove higher remaining performance obligations. EMCOR now expects revenues between $18.50 billion and $19.25 billion, and diluted earnings per share are projected in the range of $28.25 to $29.75.
Comfort Systems USA, Inc. (FIX - Free Report) delivered a sharp first quarter of 2026, with earnings and revenues topping the Zacks Consensus Estimate and increasing year over year. The quarter reflected strong market conditions, led by heavier technology-sector activity, particularly for data centers.
Comfort Systems also highlighted that recent bookings and underlying persistent demand supported a higher backlog even with increased project burn rates, an important indicator that volume remains strong across key end markets. The backlog as of March 31, 2026, totaled $12.45 billion, increasing 4.3% from $11.94 billion on Dec. 31, 2025, and jumping 80.8% from $6.89 billion reported a year ago.
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AECOM Stock Up as Q2 Earnings Beat Estimates, Backlog Increases Y/Y
Key Takeaways
AECOM (ACM - Free Report) reported better-than-expected results for second-quarter fiscal 2026, where both earnings and net service revenues (“NSR”) surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. Revenues also improved from the prior-year quarter.
Shares of this global infrastructure leader gained 1.4% in yesterday’s after-hours trading session. Positive investor sentiments were witnessed as the company raised its adjusted EBITDA and adjusted earnings forecast for fiscal 2026.
AECOM delivered a record second-quarter performance, supported by strong execution, expanding margins and continued backlog growth. The company’s design pipeline reached another all-time high. Management noted that investments in AI capabilities and the higher-margin Advisory business continue to strengthen the company’s competitive positioning and support long-term growth opportunities.
Delving Deeper Into ACM’s Q2 Results
The company reported adjusted earnings per share (EPS) of $1.59, which topped the consensus mark of $1.58 by 0.6% and increased 27% from the prior-year quarter.
Revenues of $3.80 billion grew 1% year over year. NSR of $1.95 billion surpassed the consensus mark of $1.93 billion by 1.2% and increased 4% year over year.
AECOM Price, Consensus and EPS Surprise
AECOM price-consensus-eps-surprise-chart | AECOM Quote
Total backlog at the fiscal second-quarter end was $26.20 billion, up 8% from the year-ago period. AECOM’s design business delivered a solid 1.2x book-to-burn ratio. This marks the 22nd consecutive quarter with a book-to-burn ratio above 1.0, reflecting sustained demand. Additionally, the company’s design pipeline increased double digits and reached a record level. This growth is being driven by strong funding across the company’s major markets and an expanding addressable market opportunity.
ACM’s Segment Details
Americas’ revenues were $2.91 billion during the reported quarter, up 1% from the prior-year quarter’s levels. NSR of $1.19 billion moved up 5% year over year, driven by 8% growth in the Americas design business.
Adjusted operating income of $239 million was up 10% year over year. Adjusted operating margin (on an NSR basis) expanded 60 basis points (bps) year over year to a new high of 20%. This growth was driven by continued focus on operational efficiencies and strong returns on investments supporting organic growth initiatives.
The total backlog at the end of the fiscal second quarter increased 2% year over year to a record high, supported by a 1.1x book-to-burn ratio in the Americas design business.
International revenues rose 2% year over year to $890 million. However, NSR declined 3% year over year to $754 million due to lower activity in the Asia and Middle East markets.
Adjusted operating income in the segment increased 2% year over year to $84 million. Adjusted operating margin (on an NSR basis) remained broadly unchanged year over year at 11.1%. The performance reflected lower revenues in certain regions related to the Middle East conflict, partly offset by continued investments in strategic growth initiatives.
The total backlog at the end of the fiscal second quarter surged 25% year over year to a new record high, supported by strong wins in the United Kingdom and Middle East markets.
AECOM Capital reported an operating loss of $1.5 million during the period.
Operating Highlights of ACM
Adjusted segment operating profit amounted to $322 million, up 7% from the year-ago quarter. The segment’s adjusted operating margin improved 50 bps to 16.5%.
Adjusted EBITDA rose 8% year over year to $312 million. Adjusted EBITDA margin of 16.5% also rose 20 bps year over year.
Liquidity & Cash Flow of ACM
At the end of the fiscal second quarter, AECOM’s cash and cash equivalents totaled $1.03 billion, down from $1.59 billion at fiscal 2025-end. The total debt (excluding unamortized debt issuance costs) as of March 31, 2026, was $2.75 billion compared with $2.74 billion at Sept. 30, 2025.
At the fiscal second-quarter end, operating cash flow decreased 98% year over year to $3.8 million. Free cash flow was negative $27.4 million against the positive free cash flow of $178.4 million a year ago. Management attributed the decline primarily to delayed payment timing in the Middle East business and slower claims resolution on certain projects.
ACM Raises FY26 Guidance
AECOM raised its fiscal 2026 adjusted EBITDA and EPS guidance, supported by strong year-to-date execution, record backlog and sustained pipeline growth.
It is now expecting adjusted EPS in the range of $5.90-$6.10 compared with the prior expectation of $5.85-$6.05. This indicates 14% year-over-year growth at the midpoint of the guidance.
AECOM expects adjusted EBITDA in the range of $1.275-$1.305 billion compared with the previous expectation of $1.270-$1.305 billion. This indicates 7% year-over-year growth at the midpoint.
Free cash flow is still expected to be approximately $400 million. ACM also reaffirmed its expectation for organic NSR growth in the range of 6-8%, along with a segment-adjusted operating margin of 16.8% and adjusted EBITDA margin of 17%.
ACM Reaffirms Long-Term Targets
AECOM reaffirmed its long-term financial targets, including achieving more than 20% margin exit rate by fiscal 2028 and delivering adjusted EPS growth over 15% CAGR from fiscal 2026 through fiscal 2029. Management noted that continued investments in AI capabilities, Advisory services and operational efficiencies are expected to support these long-term objectives.
ACM’s Zacks Rank & Recent Construction Releases
AECOM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vulcan Materials Company (VMC - Free Report) posted exceptional first-quarter 2026 results with adjusted earnings and total revenues beating the Zacks Consensus Estimate and increasing year over year. The quarter’s results reflect benefits realized from the aggregates-led business and consistent focus on its strategic disciplines. Besides, efforts to incorporate top-tier innovation and technology advancements also aided the quarter’s financial performance.
Vulcan reiterated its full-year adjusted EBITDA outlook of $2.4-$2.6 billion and cited a healthy backlog supported by large projects and public construction activity.
EMCOR Group, Inc. (EME - Free Report) reported impressive first-quarter 2026 results, with earnings and revenues topping the Zacks Consensus Estimate and increasing year over year on strong demand across its core markets.
The company’s quarterly results reflect continued momentum across key end markets and customers’ confidence in its ability to execute complex and mission-critical projects. Strong activity in sectors like Network and Communications, Institutional, Healthcare, and Water and Wastewater supported growth and drove higher remaining performance obligations. EMCOR now expects revenues between $18.50 billion and $19.25 billion, and diluted earnings per share are projected in the range of $28.25 to $29.75.
Comfort Systems USA, Inc. (FIX - Free Report) delivered a sharp first quarter of 2026, with earnings and revenues topping the Zacks Consensus Estimate and increasing year over year. The quarter reflected strong market conditions, led by heavier technology-sector activity, particularly for data centers.
Comfort Systems also highlighted that recent bookings and underlying persistent demand supported a higher backlog even with increased project burn rates, an important indicator that volume remains strong across key end markets. The backlog as of March 31, 2026, totaled $12.45 billion, increasing 4.3% from $11.94 billion on Dec. 31, 2025, and jumping 80.8% from $6.89 billion reported a year ago.