AECOM (ACM) Q3 2026 earnings summary

Executive summary

• Record backlog reached $27.8 billion, up 13% year-over-year, driven by a 1.6x book-to-burn ratio and strong wins in both Americas and International segments.

• Results were significantly impacted by a $337 million pre-tax charge on a delayed Construction Management project, primarily due to subcontractor delays and higher costs, with completion expected in Q2 FY2027.

• Excluding the project charge, adjusted EBITDA and EPS improved year-over-year by 5% and 11%, respectively, with robust pipeline and double-digit backlog growth.

• Underlying business performance remains strong, with high win rates and continued margin expansion, despite project-specific headwinds.

• The company continues to face significant claims and delays on two major Construction Management projects, impacting cash flow and profitability.

Financial highlights

• Q3 FY2026 revenue was $3.59 billion, down 14% year-over-year; NSR was $1.61 billion as reported, or $1.95 billion excluding the Construction Management charge.

• Adjusted EBITDA was $(8) million as reported, or $329 million excluding the charge, up 5% year-over-year; adjusted EPS was $(0.50) as reported, or $1.49 excluding the charge, up 11% year-over-year.

• Full-year NSR guidance is $7.30–$7.35 billion as reported, or $7.65–$7.70 billion excluding the charge; adjusted EBITDA guidance is $935–$965 million as reported, or $1,275–$1,305 million excluding the charge.

• Free cash flow was $55 million in Q3 and is expected to be ~$300 million for FY2026.

• Cash and cash equivalents at June 30, 2026 were $1.01 billion, with net leverage at 1.5x and no near-term debt maturities.

Outlook and guidance

• FY2026 adjusted EPS guidance revised to $3.95–$4.15 as reported, or $5.90–$6.10 excluding the project charge.

• Long-term organic growth algorithm reaffirmed at 5%–8% for the entire business, with 20%+ margin exit rate by FY2028 and 15%+ adjusted EPS CAGR from FY2026–FY2029.

• Construction Management expected to return to growth in the second half of 2027 as backlog ramps up and resources are redeployed.

• Free cash flow expected to recover after the first half of 2027 as legacy project cash outflows subside.

• Net cash outflows of $600–800 million are expected through completion of two delayed Construction Management projects.