Any reference to segment margins or segment adjusted operating margins will reflect the performance for the Americas and international segments. When discussing revenue and revenue growth, we will refer to Net Service Revenue or NSR, which is defined as revenue excluding pass-through revenue. NSR growth rates are presented on a constant currency basis unless otherwise noted. On today's call, Troy Rudd, our Chief Executive Officer, will review our key accomplishments, our strategy, and our outlook for the business.
Lara Poloni, our President, will discuss key operational successes and priorities, and Gaurav Kapoor, our Chief Financial and Operations Officer, will review our financial performance and outlook in greater detail. This performance stems from the dedication of our professionals, unmatched technical expertise, high-returning organic growth investments, trusted client relationships, and strong market trends. We set new records for NSR margins, EBITDA, EPS, backlog, and pipeline. As a result, we are confident in raising our annual financial guidance for the third consecutive time this year.
Organic NSR growth accelerated to 6%, led by 8% growth in the Americas, our highest margin segment. Importantly, we delivered a 17.1% segment adjusted operating margin, which is a new record for the organization. First, we have demonstrated consistently that through our returns-based capital allocation policy, investments in organic growth initiatives have the highest returns. This includes not only standing up and accelerating the growth of our program management and advisory businesses, but also the record level of business development investment we make quarter-after-quarter.
| Metric | Period | Current guidance |
|---|---|---|
| Adjusted EPS growth | FY2025 | +16% at the midpoint (raised for the third consecutive quarter) |
| Adjusted EBITDA growth | FY2025 | +10% at the midpoint |
| Segment adjusted operating margin | FY2025 | 16.5% (+70 bps YoY, more than double the 20-30 bps annual improvement in the long-term framework) |
| Free cash flow conversion | FY2025 | At least 100% conversion (would mark the fifth consecutive year at or better than this level) |
| Organic NSR growth | FY2025 | Within the prior range but trending toward the lower end; growth expected to pick up in Q4 |
| Long-term organic NSR growth algorithm | Long-term | 5%-8% reaffirmed as a good range heading into next year (planning process not yet complete) |
| Metric | YoY | Note |
|---|---|---|
| Organic NSR growth (total) | +6% | Led by 8% growth in the Americas plus increased growth across most large international markets, driven by accelerating infrastructure, sustainability, and energy mega-trends. |
| Americas NSR | +8% | Growth in AECOM's largest and highest-margin market, supported by high-returning organic growth investments and a record pipeline. |
| Americas adjusted operating margin | +120 bps to 20.5% | New quarterly record reflecting growth in the largest market and returns from organic growth investments. |
| International NSR | +3% | Growth driven by the U.K. and the Middle East, partially offset by a decline in Australia. |
| International adjusted operating margin | +20 bps to 11.9% | Continued execution across the largest and highest-returning geographies; international backlog up 8% and contracted backlog up 15%. |
| Segment adjusted operating margin | +90 bps to 17.9% | Record margin milestone reached more than a year early, driven by high-returning organic investments and operational cost focus, with no extraordinary items. |
| Adjusted EBITDA | +10% | Strong operational performance across the company; up 9% on a year-to-date basis. |
| Adjusted EPS | +16% | Margin expansion and earnings growth; up 20% on a year-to-date basis. |
| Free cash flow | +27% YTD (to a new all-time high) | $262 million delivered in the quarter with industry-leading earnings-to-cash conversion; on track for at least 100% full-year conversion. |
| Backlog / book-to-burn | All-time high; book-to-burn >1 | 19th consecutive quarter of book-to-burn above one; Americas design backlog +4%, international backlog +8%, driven by >50% win rate and >80% success on largest pursuits. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Program management & advisory expansion | Standing up advisory and program management businesses | Advisory grew double digits with a goal to double it to $400 million of NSR within three years as the next $1 billion platform; AECOM won nearly 90% of its largest program management pursuits this year and remains on track for 50%+ of revenue from program management and advisory over time. | — |
| Data center / AI market demand | Established global data center practice | Global data centers practice doubled NSR over the last two years; U.S. data center investment projected to triple by 2030, with AECOM positioned across advisory, program management, and design to address land, power, and water constraints in 40+ countries. | — |
| Internal AI & automation deployment | Began investing in AI ~18 months ago | AI is already having a favorable impact on margins and results across how AECOM runs the business and delivers work; management expects a material, visible impact over the next two to three years, complementing rather than replacing its people and Enterprise Capability Centers. | — |
| U.S. federal & infrastructure funding | IIJA funding ramping; post-election agenda uncertainty | Only 36% of IIJA funding targeted to AECOM's markets has been spent; the Big Beautiful Bill adds tax incentives plus $150 billion of mandatory defense spending (DoD is the largest single client) and aviation/Coast Guard funding, while state DOT budgets are forecast to hit a record high in 2026. | — |
| International markets (U.K., Middle East, Australia) | — | The U.K.'s new 10-year infrastructure strategy commits £725 billion; the Middle East navigated a reprioritization toward World Expo and World Cup infrastructure in Saudi Arabia with UAE strength; Australia/Asia saw a near-term pause in larger transportation awards. | — |
| Returns-based capital allocation & capital returns | Consistent returns-based policy | Policy unchanged; nearly $240 million returned to shareholders YTD ($2.7 billion since September 2020), net leverage of 0.6, low cost of debt, and no maturities until 2029; buybacks follow free-cash-flow generation and will step up in Q4. | — |
| Enterprise Capability Centers | Mid-to-high single-digit share of total labor hours | Still in the mid-to-high single digits of delivered labor hours, with a path to middle-double-digits over the short-to-medium term, providing a continued margin tailwind alongside AI. | — |