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AECOM Tops Q2 Earnings, Misses on Revenue, Boosts 2025 View
ACMAECOM(ACM) ZACKS·2025-05-06 15:05

Core Viewpoint - AECOM reported mixed results for Q2 fiscal 2025, with earnings exceeding estimates while revenues fell short of expectations and declined year-over-year, although net service revenues (NSR) increased [1][3]. Financial Performance - Adjusted earnings per share (EPS) reached 1.25,surpassingtheconsensusestimateof1.25, surpassing the consensus estimate of 1.15 by 8.7% and marking a 20% increase from the previous year [3]. - Total revenues amounted to 3.77billion,a43.77 billion, a 4% decline year-over-year, while adjusted NSR grew by 4% to 1.87 billion [3]. - Adjusted operating income rose to 218million,reflectinga13218 million, reflecting a 13% year-over-year increase, with an adjusted operating margin of 19.4%, up 130 basis points [6]. Backlog and Pipeline - Total backlog at the end of Q2 was 24.27 billion, an increase from 23.74billionayearago,withdesignbacklogreachingarecordhigh[4].−Thebook−to−burnratiointheU.S.designbusinesswas1.2x,markingthe18thconsecutivequarterabove1.0,indicatingsustaineddemand[4].SegmentPerformance−RevenuesintheAmericassegmentwere23.74 billion a year ago, with design backlog reaching a record high [4]. - The book-to-burn ratio in the U.S. design business was 1.2x, marking the 18th consecutive quarter above 1.0, indicating sustained demand [4]. Segment Performance - Revenues in the Americas segment were 2.9 billion, down 5% year-over-year, but NSR increased by 6% to 1.1billion,drivenbystrongperformanceinthedesignbusiness[5].−Internationalrevenuesdecreasedby31.1 billion, driven by strong performance in the design business [5]. - International revenues decreased by 3% to 875 million, while NSR grew by 1% to 742million,supportedbygrowthintheU.K.andHongKong[7].CashFlowandLiquidity−Cashandcashequivalentstotaled742 million, supported by growth in the U.K. and Hong Kong [7]. Cash Flow and Liquidity - Cash and cash equivalents totaled 1.6 billion, slightly up from 1.58billionattheendoffiscal2024,withtotaldebtat1.58 billion at the end of fiscal 2024, with total debt at 2.55 billion [11]. - Operating cash flow increased by 102% year-over-year to 191million,andadjustedfreecashflowroseby141191 million, and adjusted free cash flow rose by 141% to 178 million [11]. Guidance and Outlook - AECOM raised its fiscal 2025 guidance for adjusted EBITDA and EPS, expecting adjusted EPS in the range of 5.10−5.10-5.20, indicating a 14% improvement from fiscal 2024 levels [12][13]. - The company anticipates 5-8% organic NSR growth for fiscal 2025 and expects adjusted EBITDA between 1.180−1.180-1.210 billion, reflecting 9% year-over-year growth at the midpoint [13][14].