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 substantial completion expected in Q2 FY2027.

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

• International segment revenue grew, while Americas segment revenue declined due to project-specific losses.

• 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, down 16%.

• Adjusted for the charge, full-year NSR guidance is $7.65–$7.7 billion, with adjusted EBITDA and EPS at $1.29–$1.305 billion and $6, respectively.

• Reported NSR for the year expected at $7.3–$7.35 billion, with adjusted EBITDA and EPS of $935–$965 million and $3.95–$4.15 at midpoints.

• Free cash flow for FY2026 expected at $300 million, down from previous $400 million guidance due to project cash burn.

• Operating cash flow for the nine months was $169.2 million, down from $625.5 million in the prior year period.

Outlook and guidance

• Long-term organic growth algorithm reaffirmed at 5%-8% annually, including Construction Management.

• Construction Management expected to return to growth in the second half of FY2027 as legacy projects conclude.

• Americas margins expected to normalize in Q4 and improve in FY2027, with International margins continuing strong performance.

• Interest expense projected to rise by $30–$35 million in 2027 due to higher average debt balances from project cash burn.

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