AECOM (ACM) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 delivered record results in net service revenue, adjusted EBITDA, EPS, and free cash flow, all exceeding guidance, driven by strong backlog and pipeline growth.

• Strategic initiatives included launching the Water and Environment Advisory business, targeting to double its size in three years and become a $1 billion high-margin platform.

• Achieved top industry rankings in all key market sectors, including water design, and advanced Program Management to number two.

• Returned $560 million to shareholders in FY24 via $450 million in share repurchases and $115 million in dividends, with a new $1 billion repurchase authorization and 18% dividend increase.

• Maintained a 1.2x book-to-burn ratio in the design business for Q4 and ended the year with record backlog and pipeline, up 10% year-over-year.

Financial highlights

• Adjusted EBITDA reached $1.1 billion in FY24, up 14% year-over-year; adjusted EPS was $4.52, up 22%; free cash flow hit $708 million, up 20% year-over-year.

• Adjusted EBITDA margin expanded to 16.7% in Q4 and 16.0% for the year, up 100–150 basis points year-over-year.

• Segment adjusted operating margin in Americas reached 18.8% for the year and 19.6% in Q4; International margin hit 12.6% in Q4 and 11.5% for the year.

• Book-to-burn ratio in design business at 1.2 for Q4, with 16 consecutive quarters above 1.0.

• Total backlog reached a record $23.9 billion, with design backlog up 5% and pipeline up 10% year-over-year.

Outlook and guidance

• Fiscal 2025 guidance: 5–8% net service revenue growth, adjusted EBITDA of $1,170–$1,210 million (up 9% at midpoint), and adjusted EPS of $5.00–$5.20 (up 13% at midpoint).

• Adjusted EBITDA margin expected at 16.3%, up 30 basis points; free cash flow conversion expected to exceed 100%.

• NSR growth expected to accelerate in the second half of 2025, supported by strong backlog and pipeline.

• Continued double-digit annual dividend growth targeted, with a new $1 billion share repurchase authorization.

• Margin expansion expected to continue, aiming for 17%+ enterprise margin by FY27.