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AECOM reported Q3 FY2026 revenue of $3.6 billion, down from $4.2 billion a year earlier. As the consensus counts it, revenue was $1.6 billion, below the $2.1 billion estimate; that measure differs from reported revenue.
The filing attributed the Americas revenue decline partly to a $473.0 million decrease on a construction management project and a $153.6 million decline in subcontractor pass-through revenue. International revenue rose to $953.1 million from $901.1 million, with increases in facilities, energy and transportation.
AECOM recorded a $336.8 million loss on a construction management project. The filing said that loss was the primary reason Americas gross profit fell to a loss. Company-wide gross margin was −0.95%, compared with 7.82% a year earlier, while diluted EPS moved to −$0.67 from $0.98.
AECOM reported free cash flow of $55.1 million, down from $261.7 million a year earlier. The filing said delayed claims collection on two construction management projects could constrain the timing of stock repurchases.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $3.6 billion | $4.2 billion | −14.2% |
| Diluted EPS | −$0.67 | $0.98 | −168.4% |
| Gross margin | −0.95% | 7.82% | −8.8 percentage points |
| Operating margin | −2.12% | 7.04% | −9.2 percentage points |
| Free cash flow | $55.1 million | $261.7 million | −79.0% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Revenue | $1.6 billion | $2.1 billion | Missed by 23.1% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Troy Rudd said the construction management charge primarily reflected a project delay, with subcontractor productivity in the final phase the largest factor. He now expects substantial completion near the end of Q2 FY2027, rather than Q1, and said claims resolution would take time and continue to burden cash flow through the first half of fiscal 2027.
Asked about the schedule, Rudd said systems testing, integration and commissioning were drawing out the charged project. He said the other project remained on schedule for completion in Q1 FY2027. Rudd said AECOM had tightened risk controls and stopped pursuing design-build work for public-private partnership clients in construction management.
On demand, Rudd said backlog increased 13% and the quarterly book-to-burn ratio was 1.6 times. President Lara Poloni said quarterly wins exceeded $4 billion and included a federal program re-compete and a private-client environmental award. She said AECOM won both without a joint venture against its usual competitors.
Rudd said net service revenue growth fell below expectations because new construction management projects started more slowly than anticipated and the Middle East conflict continued to affect business. CFO Gaurav Kapoor said a Texas convention center had been delayed for several months and staff working on the two troubled projects were less available for other backlog.
Kapoor said business development activity affected Americas margins, while growth in Australia and the UK and early benefits from AECOM’s AI strategy supported international margins. He expects Americas margins to normalize next quarter and said planned organic growth investments remain unaffected by the project issues.
Asked about fiscal 2027, Rudd said it was premature to give annual guidance, though he expects construction management growth in the second half. Kapoor said the company was still early in its planning process.
Guidance
Rudd said AECOM’s updated FY2026 outlook reflects the project charge, lower-than-expected net service revenue growth and margin performance. Including the charge, he expects approximately $7.3 billion in net service revenue, with adjusted EBITDA of $950.0 million and adjusted EPS of $4.05 at the midpoints.
Excluding the charge, Rudd raised the expected adjusted EBITDA margin to 17.4% from 17%. He said adjusted EBITDA and EPS remained consistent with prior guidance on that basis. Rudd also lowered the full-year free cash flow expectation to $300.0 million from $400 million.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Operating margin, Non Gaap Ebitda Margin Exit | FY2028 | 20.0% | — | New |
| Operating expenses, Interest Expense Increase | FY2027 | $30.0 million–$35.0 million | — | New |
| Revenue, Construction Management Net Service Revenue | FY2027 | AECOM expects construction management to return to growth in fiscal 2027. | — | — |
| Revenue growth, Americas Design Net Service Revenue | Q4 FY2026 | 7.00% | — | New |
| Operating margin, Americas Non Gaap | Q4 FY2026 | AECOM expects Americas margins to normalize in the fourth quarter of fiscal 2026. | — | — |
| Free cash flow | FY2026 | $300.0 million | — | New |
| Operating margin, Non Gaap Ebitda Margin Excluding Project Charge | FY2026 | 17.4% | — | New |
| EPS, Non Gaap Excluding Project Charge | FY2026 | $6.00 | — | New |
| EBITDA, Non Gaap Excluding Project Charge | FY2026 | $1.3 million | — | New |
| Revenue, Net Service Revenue Excluding Project Charge | FY2026 | $7.7 billion–$7.7 billion | — | New |
| EPS, non-GAAP | FY2026 | $4.05 | — | New |
| EBITDA, non-GAAP | FY2026 | $950.0 million | — | New |
| Revenue, Net Service Revenue | FY2026 | $7.3 billion | — | New |
| EPS, GAAP | FY2026 | $2.37–$2.87 | — | New |
| EBITDA, Non Gaap Excluding Construction Management Charge | FY2026 | $1.3 billion–$1.3 billion | — | New |
| EPS, Non Gaap Excluding Construction Management Charge | FY2026 | $5.90–$6.10 | — | New |
| Operating margin, Segment Adjusted Excluding Construction Management Charge | FY2026 | 17.0% | — | New |
| Revenue, Net Service Revenue Excluding Construction Management Charge | FY2026 | $7.7 billion–$7.7 billion | — | New |
| Tax rate, non-GAAP | FY2026 | 19.0% | — | New |
| Operating margin | FY2027 | AECOM expects a margin uplift in FY2027. | — | — |
| Revenue, Construction Management | FY2027 | AECOM expects construction management revenue burn to ramp up in FY2027, especially from the second quarter onward. | — | — |
| Operating margin, non-GAAP | FY2026 | AECOM expects to achieve its FY2026 margin expansion goals. | — | — |
| Revenue growth, Nsr | FY2026 | 4.00%–6.00% | — | New |
| EPS growth, non-GAAP | FY2026 | $0.14 | — | New |
| EBITDA growth, non-GAAP | FY2026 | 7.00% | — | New |