A month has gone by since the last earnings report for Aecom Technology (ACM Quick QuoteACM - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Aecom due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

AECOM Q2 Earnings Beat Estimates, Backlog Increases Y/Y

AECOM reported better-than-expected results for the second quarter of 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. 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 by 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 FY 2026 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.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Aecom has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock has a score of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Aecom has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Aecom is part of the Zacks Engineering - R and D Services industry. Over the past month, KBR Inc. (KBR Quick QuoteKBR - Free Report) , a stock from the same industry, has gained 10.1%. The company reported its results for the quarter ended March 2026 more than a month ago.

KBR reported revenues of $1.92 billion in the last reported quarter, representing a year-over-year change of -6.4%. EPS of $0.96 for the same period compares with $0.98 a year ago.

KBR is expected to post earnings of $0.89 per share for the current quarter, representing a year-over-year change of -2.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.6%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for KBR. Also, the stock has a VGM Score of B.