AECOM (ACM) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 FY25 results with record margins, 5.5% NSR growth, and adjusted EPS up 25% year-over-year, exceeding expectations and raising full-year guidance.

• Record backlog and pipeline provide long-term visibility, with a 100% win rate in major pursuits and double-digit growth in late-stage pipeline opportunities.

• Strategic focus on expanding advisory services, especially Water & Environment, targeted as a $1B platform and aiming to double NSR in three years.

• Recognized as #1 in industry by Fortune's World's Most Admired Companies for 11th consecutive year and achieved high employee engagement.

• Net income attributable to AECOM rose 76.9% to $167.0 million, with gross profit margin improving to 6.7%.

Financial highlights

• Net Service Revenue (NSR) grew 5.5% year-over-year to $1,801 million, with Americas design business up 9%.

• Adjusted EBITDA increased 8% to $271 million; adjusted EPS rose 25% to $1.31; diluted EPS from continuing operations was $1.33, up 87%.

• Free cash flow grew 28% to $111 million; $55 million returned to shareholders via repurchases and dividends.

• Segment-adjusted operating margin increased 40 bps to 16.1%, surpassing annual guidance; Americas margin reached 18.7%, international 10.8%.

• Book-to-burn ratio in design business was 1.2, marking 17 consecutive quarters above one.

Outlook and guidance

• Fiscal 2025 guidance raised: organic NSR growth expected at 5–8%, adjusted EBITDA $1,175–$1,210 million (+9% YoY), adjusted EPS $5.05–$5.20 (+13% YoY).

• Margin expansion of 30 bps expected for both segment adjusted operating margin (to 16.1%) and adjusted EBITDA margin (to 16.3%).

• Free cash flow conversion expected at 100%+ of adjusted net income; tax rate guidance unchanged at 24%.

• Approximately 57% of $19.1 billion in remaining performance obligations expected to be recognized as revenue within the next twelve months.

• No new transformative restructuring actions planned for the remainder of fiscal 2025.