AECOM (ACM) Q4 2024 earnings summary

Executive summary

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

• Program Management and Water & Environment Advisory businesses saw significant growth, with the latter launched to expand addressable markets and margin potential.

• Returned $560 million to shareholders through repurchases and 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 16 consecutive quarters at or above 1.0x.

• Record backlog and pipeline, with design backlog up 5% and pipeline up 10% year-over-year.

Financial highlights

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

• Adjusted EBITDA margin was 16.0% for the year, up 100 bps; Q4 margin reached 16.7%.

• Segment adjusted operating margin was 15.8% for the year, exceeding guidance.

• Free cash flow represented 10% of net service revenue and per share grew 23% year-over-year.

• Total backlog reached a record $23.9 billion, up 3% year-over-year; design backlog increased 5%.

Outlook and guidance

• Fiscal 2025 guidance: 5–8% net service revenue growth, adjusted EBITDA of $1,170–$1,210 million, and adjusted EPS of $5.00–$5.20, with margin expansion to 16.3%.

• Free cash flow conversion expected to exceed 100% of adjusted net income; tax rate to remain at ~24%.

• NSR growth expected to accelerate in the second half of 2025, with Americas leading and International ramping up as funding returns.

• Long-term targets: 5–8% annual organic NSR growth, 20–30bps annual EBITDA margin expansion, and at least 17% adjusted EBITDA margin by end of FY25.