AECOM's Q1 Earnings Surpass Estimates, Stock Up, Backlog Up Y/Y

Core Insights - AECOM reported strong first-quarter fiscal 2025 results, with earnings exceeding estimates and showing year-over-year growth, supported by solid organic net service revenue growth in its design business [1][4] - The company raised its adjusted EBITDA and earnings forecast for fiscal 2025, reflecting positive investor sentiment [2] - AECOM's strategy of "Think and Act Globally" is yielding high win rates and a record backlog, with plans to double net service revenues from its new Water and Environment Advisory business [3] Financial Performance - Adjusted EPS for the quarter was $1.31, surpassing the consensus estimate of$1.10 by 19.1% and increasing 24.8% from $1.05 in the prior year [4] - Revenues reached$4.01 billion, a 3% increase year-over-year, while adjusted net service revenues rose 5.5% to $1.80 billion [4] - Adjusted operating income was$196.9 million, up 10% year-over-year, with an adjusted operating margin of 18.7%, expanding by 40 basis points [6] Segment Performance - Americas' revenues were $3.11 billion, up 2$1.05 billion increasing 8% [5] - International revenues increased 5% year-over-year to $902 million, with net service revenues rising 2$750.2 million [7] - Total backlog at the end of the fiscal first quarter was $23.88 billion, compared to$23.32 billion in the prior year, with a design business backlog increase of 3.5% [11] Cash Flow and Liquidity - Cash and cash equivalents totaled $1.58 billion, consistent with the previous fiscal year-end, while total debt slightly increased to$2.55 billion [13] - Operating cash flow rose 6% year-over-year to $151 million, and adjusted free cash flow increased 28$111 million [13] Guidance and Long-Term Outlook - AECOM anticipates 5-8% organic net service revenue growth for fiscal 2025, with adjusted EPS expected in the range of $5.05-$5.20, indicating a 13% improvement from fiscal 2024 [14] - Adjusted EBITDA is projected to be between $1.175 billion and$1.210 billion, reflecting 9% year-over-year growth at the midpoint [15] - The company aims for at least 20-30 basis points adjusted EBITDA margin expansion and double-digit adjusted EPS growth annually, with a long-term goal of achieving a 17% adjusted EBITDA margin by the end of fiscal 2026 [16]