AECOM (ACM) Business Profile

What it does

AECOM provides infrastructure consulting and advisory services to governments, businesses and other organizations. Its work spans transportation, buildings and other facilities, water, the environment and energy. Founded in 1990, the company is headquartered in Los Angeles, and Troy Rudd is its chief executive.

AECOM helps clients plan, design and manage infrastructure projects. Its services include engineering and architectural design, advice on project strategy and costs, environmental work, and management of construction and larger programs. For example, its water work includes designing treatment facilities, supply systems and water reuse projects. Its transportation work includes rail, highways, bridges, ports and airports.

The company can work on different stages of a project. An assignment may begin as a small planning or consulting contract and later expand into design, advisory or management work. Project teams may work at the client’s site, and AECOM sometimes joins with other companies to deliver larger contracts.

Most of the business is organized into Americas and International service segments. A separate AECOM Capital segment invests in and develops real estate, typically alongside investors and developers. AECOM employed approximately 51,000 people at the end of fiscal 2025; many have technical and professional backgrounds.

How it makes money

AECOM primarily earns fees for knowledge-based services. It bills for employees’ time on client projects, collects payment from clients and manages the costs of delivering the work. Revenue also includes amounts passed through for subcontractors and other direct project costs. AECOM generally recognizes revenue over time as it performs its obligations.

The Americas and International segments provide planning, consulting, design and project-management services. Americas also provides construction management. AECOM Capital primarily earns income from real estate development sales and management fees. It typically works with investors and developers as a co-general partner, and its investment activity can involve joint ventures or subsidiaries.

Contracts use several pricing arrangements. On cost-reimbursable work, AECOM charges for costs plus a negotiated fee or rate; time-and-materials contracts generally use agreed hourly rates and reimburse eligible direct expenses. Guaranteed maximum price contracts set a project price subject to client change orders, while fixed-price contracts pay a specified amount or an agreed price per unit of work. Some contracts also include performance-based fees or penalties.

AECOM’s work can extend over multiple phases or years, and clients may engage it again for subsequent assignments. Backlog is expected future revenue, but it can include work awarded before a contract is signed and estimated pass-through costs; the company does not assure that all backlog will be realized.

In the third quarter of fiscal 2026, AECOM recorded a $337 million pre-tax charge, primarily related to a delayed construction management project.

Customers and how it sells

AECOM serves national, state, regional and local governments, public and private institutions, and corporations. Its teams deliver services directly or through joint ventures and similar arrangements. Assignments can range from individual consulting projects to programs covering several projects and stages of work.

In fiscal 2025, AECOM served both government clients and private entities worldwide. No single client accounted for 10% or more of revenue in any of the past five fiscal years. Direct contracts with agencies of the U.S. federal government represented 7.00% of fiscal 2025 revenue.

The Americas segment serves clients in the United States, Canada and Latin America. The International segment covers Europe, the Middle East, India, Africa and the Asia-Australia-Pacific regions. In fiscal 2025, Americas revenue was $12.5 billion, while International revenue was $3.6 billion.

Government clients can terminate, renegotiate or modify contracts at their convenience, and many government contracts are subject to annual renewal or extension. AECOM’s clients also include private developers and owners seeking design and management services for facilities such as offices, data centers and industrial buildings.

Suppliers and costs

AECOM’s principal costs are employee compensation, including salaries and benefits, subcontractors, other project expenses, and selling, general and administrative costs. Its cost of revenue includes its own personnel costs and overhead, subcontractor fees and other direct costs associated with projects.

Subcontractors provide services on projects, and some of their costs are passed through to clients. On certain fixed-price contracts, AECOM may require primary subcontractors to provide performance bonds, guarantees and insurance, and may pass contract terms down to them. AECOM also works with other companies in joint ventures, particularly when a project’s scale or technical requirements call for it.

The company purchases raw materials and components from numerous sources. Their prices and availability can vary with demand, production capacity, market conditions and shortages. AECOM says prolonged unavailability or significant price increases could adversely affect its business.

The company’s ability to attract and retain qualified employees, allocate labor and maintain the quality of its work affects revenue generation and profitability.

Competitive position

AECOM competes for infrastructure assignments in fragmented markets against regional, national and international firms. Competitors range from small private businesses to large companies; some have greater financial resources or focus on particular specialties. Competition varies by geography, market and the type and scope of a project. AECOM does not name specific competitors in its discussion of competition.

The company identifies its reputation, client relationships, network of offices, employee expertise and range of services as factors in competing. Its international network allows it to combine local knowledge with support from professionals elsewhere. AECOM is also investing in digital tools and AI for its design processes and client work.

Our reading: Technical expertise and the ability to combine services across a project’s life cycle support AECOM’s competitive position, particularly on assignments needing multiple disciplines. Our reading: Client relationships can help the company compete for repeat work, as shown by its environmental contract re-competes, but those contracts still face competitive bidding. Our reading: Scale and technology provide resources for delivery, though the limited upfront capital needed for professional services leaves room for new competitors.

AECOM won two environmental re-competes in the third quarter of fiscal 2026, one for a public client and one for a private client. It says it won both against competing bids without using a joint venture.

Growth opportunities

AECOM identifies aging infrastructure, urbanization and growing energy demand as drivers of its markets. It provides services across transportation, water, facilities, environmental and energy projects, and invests in digital capabilities intended to improve delivery. Its AI investments include using its data libraries to make design processes more efficient.

The company says data centers are among its fastest-growing businesses and that it has been expanding relationships with hyperscale customers. It also sees opportunities in areas such as defense, water and energy infrastructure. AECOM estimates that $40 billion to $50 billion may be needed to repair, fortify and expand U.S. military infrastructure in the Middle East; the company identifies that spending as a potential opportunity.

Backlog increased 13% in the third quarter of fiscal 2026. After the quarter, AECOM won a program-management role on a Canadian highway and bus transit project and was awarded a rail project in Saudi Arabia. The company says its international adjusted operating margin was 14.3% in the quarter, reflecting growth in Australia, higher utilization in the U.K. and initial benefits from its AI strategy.

AECOM’s long-term growth framework calls for organic growth of 5% to 8% for the whole business, including construction management. It expects construction management growth to come in the second half of the following fiscal year rather than the first half, as new awards take time to ramp up.

Structural risks

• Project losses: Fixed-price and guaranteed maximum price contracts can leave AECOM responsible for overruns or delays. In the third quarter of fiscal 2026, the company recorded a $337 million pre-tax charge primarily related to a delayed construction management project, with subcontractor productivity a major factor.

• Client spending and cancellations: Demand is cyclical and can be affected by economic downturns, interest rates and reductions in government or private spending. Clients may delay, curtail or cancel projects, and government clients can modify or terminate contracts at their convenience.

• Backlog and cash collection: Backlog includes estimated future work and pass-through costs and may not all be realized. AECOM expects resolving claims on the charged project to take time and to continue burdening cash flow through the first half of 2027.

• International exposure: Operations in different countries expose the company to currency movements, inflation, political and economic instability, regulatory changes and conflict. AECOM says conflict has created uncertainty for Middle Eastern tourism and hospitality markets.

• Regulation and liability: Government procurement rules, environmental and safety laws, and other regulations affect how AECOM operates. Violations or misconduct can result in fines, contract termination or loss of the ability to contract with government agencies; environmental contamination can also lead to substantial costs.

Bottom line

Our reading

AECOM is a people-intensive infrastructure services business whose fees depend on winning work, deploying technical staff and managing project costs. Its breadth of services and client relationships support repeat opportunities, but contracts still face competition and backlog is not guaranteed revenue. The construction management charge also shows that project delivery and cash collection can affect results even as the company wins new work.