ACM 10-K & 10-Q changes, risk factors and insider trading
Aecom · NYSE · Services-Engineering Services · CIK 868857 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations.”
Largest changes
“We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations.”see in full comparison
“Additionally, the laws and regulations concerning the use of AI continue to evolve. If the use or integration of AI systems, or the outputs generated by such systems, were determined to be non-compliant (e.g., in relation to AI statutory regimes, data privacy rights or in relation to the use of AI for certain activities or use cases), this may expose us to regulatory action or litigation. …”see in full comparison
“Artificial intelligence, machine learning, data science and similar technologies (collectively, “AI”), including third-party AI tools, may be enabled by, or integrated into, some of our business processes and solutions. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. AI algorithms may be flawed or biased. Datasets used to train or develop AI systems may be insufficient, of inferior quality, or contain biased, incorrect or incomplete information. …”see in full comparison
“•potential non-compliance with a wide variety of laws and regulations, including anti-corruption, export control and anti-boycott laws and similar non-U.S. laws and regulations;”see in full comparison
“•the ongoing conflict between Russia and Ukraine, which has resulted in the imposition by the U.S. and other nations of restrictive actions against Russia, Belarus and certain banks, companies and individuals;”see in full comparison
Stakeholder expectations with respect to environmental, social and governance matters have been rapidlysee in full comparisonevolvingevolving, including with increased scrutiny from governmental organizations, clients andincreasing.employees on such matters and related disclosures. We risk damage to our reputation if we do not act responsibly in key areas including diversity and inclusion, environmental stewardship, support for local communities and corporate governance. A failure to adequately meet evolving rules and regulations or stakeholders’ expectations, including failing to meet client commitments and targets, or being viewed negatively based on positions we do or do not take or work we do or do not perform, may result in loss of business, and an inability to attract and retain customers and talented personnel, which could have a negative impact on our business, results of operations and financial condition, and potentially on the price of our common stock and cost of capital. In addition, complying or failing to comply with existing or future federal, state, local and foreign legislation and regulations applicable to our environmental, social and governance practices, which may conflict with one another, could cause us to incur additional compliance and operational costs or actions and suffer reputational harm, which could materially and adversely affect our business, financial condition and results of operations.
Full comparison: every changed paragraph (48)
•incur additional indebtedness;
•create liens;
•pay dividends and make other distributions in respect of our equity securities;
•redeem or repurchase our equity securities;
•distribute excess cash flow from foreign to domestic subsidiaries;
•make investments or other restricted payments;
•sell assets;
•enter into transactions with affiliates; and
•effect mergers or consolidations.
•declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable;
•require us to apply all of our available cash to repay the borrowings; or
•prevent us from making debt service payments on our borrowings.
•the ongoing conflict between Russia and Ukraine, which has resulted in the imposition by the U.S. and other nations of restrictive actions against Russia, Belarus and certain banks, companies and individuals;
•imposition of governmental controls and changes in laws, regulations or policies;
•political and economic instability, including in the Middle East;
•civil unrest, acts of terrorism, force majeure, war, or other armed conflict;
•changes in U.S. and other national government trade policies affecting the markets for our services, including the imposition of tariffs;
•political unrest in Hong Kong where we have a significant presence;
•impact of health crises and their related economic impacts;
•increases in the consumer price index and interest rates;
•changes in regulatory practices, tariffs and taxes;
•potential non-compliance with a wide variety of laws and regulations, including anti-corruption, export control and anti-boycott laws and similar non-U.S. laws and regulations;
•changes in labor conditions;
•logistical and communication challenges; and
•currency exchange rate fluctuations, devaluations and other conversion restrictions.
The Building Safety Act (the “Act”), the primary legislation which introduces a new framework for the regulation of the UK construction industry, became law on April 28, 2022. While limited parts of the Act have not yet been enacted, and further secondary legislation is expected, most of the provisions are now in force. The Act extends liability periods for some historical defects in residential properties completed prior to 2022, creates a new government regulatory body responsible for building safety and new legal obligations regarding building safety, reallocates the risk related to design and construction, and requires the development of a more stringent regulatory regime for select buildings. The new legislation has resulted in new risk, litigation, regulatory and cost challenges for our United Kingdom and global operations.
We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations.
Artificial intelligence, machine learning, data science and similar technologies (collectively, “AI”), including third-party AI tools, may be enabled by, or integrated into, some of our business processes and solutions. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. AI algorithms may be flawed or biased. Datasets used to train or develop AI systems may be insufficient, of inferior quality, or contain biased, incorrect or incomplete information. The utilization of AI may increase our risk and liability exposure relating to confidentiality, intellectual property infringement, and client use restrictions. Our AI governance review process and safeguards may not be adequate to protect against these risks and challenges.
Additionally, the laws and regulations concerning the use of AI continue to evolve. If the use or integration of AI systems, or the outputs generated by such systems, were determined to be non-compliant (e.g., in relation to AI statutory regimes, data privacy rights or in relation to the use of AI for certain activities or use cases), this may expose us to regulatory action or litigation. It is possible that emerging regulations or changes to intellectual property laws may limit or block the use of AI in our business or otherwise impose restrictions that may adversely affect the efficiency of our business processes or solutions that were utilizing AI technologies.
Our competitors or other third parties may incorporate AI into their product and service offerings more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our business, financial condition and results of operations.
We have investments in and commitments to joint ventures with unrelated parties, including in connection with government services, and the investment activities of ACAP. For example, real estate and infrastructure joint ventures are inherently risky and may result in future losses since real estate markets are impacted by economic trends and government policies that we do not control. These joint ventures from time to time may borrow money to help finance their activities and, in some circumstances, we are required to provide guarantees of obligations of our affiliated entities. In addition, in connection with the investment activities of ACAP, we provide guarantees of obligations, including guarantees for completion of projects, payment of interest and carrying costs, repayment of debt, environmental indemnity obligations and other lender required guarantees. When we provide a guarantee, we may be responsible for material costs or performance in completing contractual obligations.
ACAP’s real estate business involves managing, sponsoring, investing in and developing commercial real estate projects and joint ventures (Real Estate Joint Ventures) that are inherently risky and may result in future losses based on factors beyond our control, including economic trends, government policies and competition. Our SEC-registered investment adviser jointly manages and sponsors the AECOM-Canyon Equity Fund, L.P. (the “Fund”), in which the Company indirectly holds an equity interest and which also invests in and develops Real Estate Joint Ventures on behalf of its investors. Real Estate Joint Ventures rely on substantial amounts of third party borrowing to finance their development activities and the lenders of such financings typically require AECOM or an affiliate to provide completion guarantees, repayment guarantees, environmental indemnities and other lender required credit support guarantees to secure the Real Estate Joint Ventures financing. Although the Fund and such Real Estate Joint Ventures may have reserves that will be used to share any cost overruns of the Real Estate Joint Ventures, if such reserves are depleted,unavailable, then AECOM may be required to make support paymentspayments, including to fund non-budgeted cost overruns on behalf of the Fund (but not on behalf of the Fund’s co-partner or any unaffiliated limited partners of the Real Estate Joint Ventures). Some of the Fund’s limited partners have made additional equity co-investments in certain Real Estate Joint Ventures for which AECOM will provide support payments on behalf of the limited partner co-investor in the event of a cost overrun of the Real Estate Joint Ventures after additional specific reserves have been depleted. During fiscal 2024, the Company completed a transaction pursuant to which members of the AECOM Capital team transitioned to a new third – party platform and will provide investment advisory services relating to the AECOM Capital business pursuant to certain advisory agreements. The failure of the transitioned team to adequately perform these services could negatively impact the Company. The Company has implemented comprehensive policies and procedures to oversee the provisions of these advisory services; however, these changes will impact the Company’s ability to supervise the investment team’s activities.
There is a rapidlyan evolving awareness and focusscrutiny from stakeholders with respect to environmental, social and governance practices, which could affect our business.
Stakeholder expectations with respect to environmental, social and governance matters have been rapidly evolvingevolving, including with increased scrutiny from governmental organizations, clients and increasing.employees on such matters and related disclosures. We risk damage to our reputation if we do not act responsibly in key areas including diversity and inclusion, environmental stewardship, support for local communities and corporate governance. A failure to adequately meet evolving rules and regulations or stakeholders’ expectations, including failing to meet client commitments and targets, or being viewed negatively based on positions we do or do not take or work we do or do not perform, may result in loss of business, and an inability to attract and retain customers and talented personnel, which could have a negative impact on our business, results of operations and financial condition, and potentially on the price of our common stock and cost of capital. In addition, complying or failing to comply with existing or future federal, state, local and foreign legislation and regulations applicable to our environmental, social and governance practices, which may conflict with one another, could cause us to incur additional compliance and operational costs or actions and suffer reputational harm, which could materially and adversely affect our business, financial condition and results of operations.
•the consequences of a change in tax treatment and the possibility that the full benefits anticipated from the acquisition or disposition will not be realized;
•any delay in the integration or disposition of management teams, strategies, operations, products and services;
•differences in business backgrounds, corporate cultures and management philosophies that may delay successful integration;
•the ability to retain key employees;
•the ability to create and enforce uniform standards, controls, procedures, policies and information systems;
•the challenge of restructuring complex systems, technology, networks and other assets in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies;
•potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisition, including costs to integrate beyond current estimates;
•the ability to deduct or claim tax attributes or benefits such as operating losses, business or foreign tax credits; and
•the disruption of, or the loss of momentum in, each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies.
We may be required to contribute additional cash to meet our significant underfunded benefit obligations associated with pension benefit plans we manage or multiemployer pension plans in which we participate.
•ability of our Board of Directors to authorize the issuance of preferred stock in series without stockholder approval;
•vesting of exclusive authority in our Board of Directors to determine the size of the board and to fill vacancies; and
•advance notice requirements for stockholder proposals and nominations for election to our Board of Directors.
The Organization for Economic Co-operation and Development (OECD), a global coalition of member countries, has developed a two-pillar framework to reform international taxation. The proposalframework aimsis designed to ensure that multinationals pay a minimum ratelevel of tax on their foreign profits through the introduction of a global minimum tax among other provisions. The minimum tax will affectaffects our financial statements beginning Octoberfiscal 1, 20242025 for those operations that are doing business in countries that have enacted the framework. TheWhile the current impact is limited, the continued enactment by all OECD countries or by individual countries could result in additional income tax liability, but the timing and ultimate impact on our tax obligations are uncertain.
Management's Discussion & Analysis (MD&A)
New heading “Credit Agreement”
New heading “2027 Senior Notes”
New heading “2033 Senior Notes”
Removed heading “Amortization Expense of Acquired Intangible Assets”
Removed heading “Government Contract Matters”
Removed heading “Allowance for Doubtful Accounts and Expected Credit Losses”
Removed heading “Contract Assets and Contract Liabilities”
Removed heading “Investments in Unconsolidated Joint Ventures”
Removed heading “Goodwill and Acquired Intangible Assets”
Removed heading “Pension Benefit Obligations”
Removed heading “Department of Energy Deactivation, Demolition, and Removal Project”
Removed heading “Refinery Turnaround Project”
Largest changes
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect the Company’s current beliefs, expectations or intentions regarding future events. These statements include forward-looking statements with respect to the Company, including the Company’s business, operations and strategy, and infrastructure consulting industry. Statements that are not historical facts, without limitation, including statements that use terms such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “may,” “plans,” “potential,” “projects,” and “will” and that relate to our future revenues, expenditures and business trends; future reduction of our self-perform at-risk construction exposure; future accounting estimates; future contractual performance obligations; future conversions of backlog; future capital allocation priorities, including common stock repurchases, future trade receivables, future debt pay downs; future post-retirement expenses; future tax benefits and expenses, and the impact of future tax laws; future compliance with regulations; future legal claims and insurance coverage; future effectiveness of our disclosure and internal controls over financial reporting; future costs savings; and other future economic and industry conditions, are forward-looking statements. In light of the risks and uncertainties inherent in all forward-looking statements, the inclusion of such statements in this Annual Report should not be considered as a representation by us or any other person that our objectives or plans will be achieved. Although management believes that the assumptions underlying the forward-looking statements are reasonable, these assumptions and the forward-looking statements are subject to various factors, risks and uncertainties, many of which are beyond our control, including, but not limited to, our business is cyclical and vulnerable to economic downturns and client spending reductions; government shutdowns;see in full comparisonlong-termchangesgovernmentincontractsadministration or other funding directives andsubjectcircumstancestothatuncertainties related to government contract appropriations;cause governmental agenciesmayto modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; long-term government contracts are subject to uncertainties related to government contract appropriations; losses under fixed-price contracts; limited control over operations run through our joint venture entities; liability for misconduct by our employees or consultants; changes in government laws, regulations and policies, including failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; potential high leverage and inability to service our debt and guarantees; our capital allocation strategy, including our ability to continue payment of dividends; exposure to political and economic risks in different countries, includingtariffs,tariffs and trade policies, geopolitical events, and conflicts; inflation, currency exchangeraterates and interest rate fluctuations; changes in capital markets and stock market volatility; retaining and recruiting key technical and management personnel; legal claims and litigation; inadequate insurance coverage; environmental law compliance and inadequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; managing pension costs; AECOM Capital’s real estate development; cybersecurity issues, IT outages and data privacy; risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction, and oil and gas construction businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect; risks associated with our strategic initiatives, including AI investments and potential acquisitions and divestitures, as well as other additional risks and factors discussed in this Annual Report on Form 10-K and any subsequent reports we file with the SEC. Accordingly, actual results could differ materially from those contemplated by any forward-looking statement.
“We test goodwill for impairment annually for each reporting unit in the beginning of the fourth quarter of the fiscal year and between annual tests, if events occur or circumstances change which suggest that goodwill should be evaluated. Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors. A reporting unit is defined as an operating segment or one level below an operating segment. …”see in full comparison
“Goodwill is evaluated for impairment either by assessing qualitative factors or by performing a quantitative assessment. Qualitative factors, such as overall financial performance, industry or market considerations, or other relevant events, are assessed to determine if it is more likely than not that the fair value of the reporting units is less than their carrying amounts. During a quantitative impairment test, we estimate the fair value of the reporting unit using income and market approaches, and compare that amount to the carrying value of that reporting unit. …”see in full comparison
“The Former Affiliate of the Company entered into an agreement to perform turnaround maintenance services during a planned shutdown at a refinery in Montana in December 2017. The turnaround project was completed in February 2019. Due to circumstances outside of the Company’s Former Affiliate’s control, including client directed changes and delays and the refinery’s condition, the Company’s Former Affiliate performed additional work outside of the original contract over $90 million and is entitled to payment from the refinery owner of approximately $144 million. …”see in full comparison
Full comparison: every changed paragraph (110)
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect the Company’s current beliefs, expectations or intentions regarding future events. These statements include forward-looking statements with respect to the Company, including the Company’s business, operations and strategy, and infrastructure consulting industry. Statements that are not historical facts, without limitation, including statements that use terms such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “may,” “plans,” “potential,” “projects,” and “will” and that relate to our future revenues, expenditures and business trends; future reduction of our self-perform at-risk construction exposure; future accounting estimates; future contractual performance obligations; future conversions of backlog; future capital allocation priorities, including common stock repurchases, future trade receivables, future debt pay downs; future post-retirement expenses; future tax benefits and expenses, and the impact of future tax laws; future compliance with regulations; future legal claims and insurance coverage; future effectiveness of our disclosure and internal controls over financial reporting; future costs savings; and other future economic and industry conditions, are forward-looking statements. In light of the risks and uncertainties inherent in all forward-looking statements, the inclusion of such statements in this Annual Report should not be considered as a representation by us or any other person that our objectives or plans will be achieved. Although management believes that the assumptions underlying the forward-looking statements are reasonable, these assumptions and the forward-looking statements are subject to various factors, risks and uncertainties, many of which are beyond our control, including, but not limited to, our business is cyclical and vulnerable to economic downturns and client spending reductions; government shutdowns; long-termchanges governmentin contractsadministration or other funding directives and subjectcircumstances tothat uncertainties related to government contract appropriations;cause governmental agencies mayto modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; long-term government contracts are subject to uncertainties related to government contract appropriations; losses under fixed-price contracts; limited control over operations run through our joint venture entities; liability for misconduct by our employees or consultants; changes in government laws, regulations and policies, including failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; potential high leverage and inability to service our debt and guarantees; our capital allocation strategy, including our ability to continue payment of dividends; exposure to political and economic risks in different countries, including tariffs,tariffs and trade policies, geopolitical events, and conflicts; inflation, currency exchange raterates and interest rate fluctuations; changes in capital markets and stock market volatility; retaining and recruiting key technical and management personnel; legal claims and litigation; inadequate insurance coverage; environmental law compliance and inadequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; managing pension costs; AECOM Capital’s real estate development; cybersecurity issues, IT outages and data privacy; risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction, and oil and gas construction businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect; risks associated with our strategic initiatives, including AI investments and potential acquisitions and divestitures, as well as other additional risks and factors discussed in this Annual Report on Form 10-K and any subsequent reports we file with the SEC. Accordingly, actual results could differ materially from those contemplated by any forward-looking statement.
Our fiscal year consists of 52 or 53 weeks, ending on the Friday closest to September 30. For clarity of presentation, we present all periods as if the year ended on September 30. We refer to the fiscal year ended September 30, 20232024 as “fiscal 20232024” and the fiscal year ended September 30, 20242025 as “fiscal 2024.2025.” Fiscal years 2024, 2023, and 2022 each contained 52, 52, and 52 weeks, respectively, and ended on September 27, September 29, and September 30, respectively.
•Americas: Planning, advisory, consulting, architectural and engineering design, construction management and program management services to public and private clients in the United States, Canada, and Latin America in major end markets such as transportation, water, government, facilities, environmental, and energy.
•International: Planning, advisory, consulting, architectural and engineering design services, site supervision and program management to public and private clients in Europe, the Middle East, India, Africa and the Asia-Australia-Pacific regions in major end markets such as transportation, water, government, facilities, environmental, and energy.
•AECOM Capital (ACAP): Primarily invests in and develops real estate projects.
We have exited substantially all of our former self-perform at-risk construction businesses. As part of our ongoing plan to improve profitability and maintain a reduced risk profile, we continuously evaluate our geographic exposure.
We completed a transaction that transitioned the AECOM Capital team to a new third-party platform in the third quarter of fiscal 2024. TheMembers of the legacy team will continue to support AECOM Capital’sCapital's investment vehicles pursuant to certain advisory agreements in a manner consistent with their currenthistorical obligations.responsibilities.
There waswere onetwo business acquisition consummated during the year ended September 30, 2024,2025. andThere therewas wereone no acquisitionsacquisition consummated during the yearsyear ended September 30, 20232024 and 2022.there was no acquisition consummated during the year ended September 30, 2023.
All of our business acquisitions have been accounted for as business combinations and the results of operations of the acquired companies have been included in our consolidated results since the dates of the acquisitions. Those results of operations were not material to our consolidated results.
Amortization Expense of Acquired Intangible Assets
Included in our cost of revenue is amortization of acquired intangible assets. We have ascribed value to identifiable intangible assets other than goodwill in our purchase price allocations for companies we have acquired. These assets include, but are not limited to, backlog and customer relationships. To the extent we ascribe value to identifiable intangible assets that have finite lives, we amortize those values over the estimated useful lives of the assets. Such amortization expense, although non-cash in the period expensed, directly impacts our results of operations.
Restructuring and Acquisition Costs
Restructuring and acquisition costs are comprised of personnel and other costs, real estate costs, and costs associated with business exits and acquisitions primarily related to actions that are expected to deliver continued margin expansion and operating efficiencies.
Government Contract Matters
Our federal government and certain state and local agency contracts are subject to, among other regulations, regulations issued under the Federal Acquisition Regulations (FAR). These regulations can limit the recovery of certain specified indirect costs on contracts and subject us to ongoing multiple audits by government agencies such as the Defense Contract Audit Agency (DCAA). In addition, most of our federal and state and local contracts are subject to termination at the discretion of the client.
Audits by the DCAA and other agencies consist of reviews of our overhead rates, operating systems and cost proposals to ensure that we account for such costs in accordance with the Cost Accounting Standards of the FAR (CAS). If the DCAA determines we have not accounted for such costs consistent with CAS, the DCAA may disallow these costs. There can be no assurance that audits by the DCAA or other governmental agencies will not result in material cost disallowances in the future.
Allowance for Doubtful Accounts and Expected Credit Losses
We record accounts receivable net of an allowance for doubtful accounts. This allowance for doubtful accounts is estimated based on management’s evaluation of the contracts involved and the financial condition of our clients. The factors we consider in our contract evaluations include, but are not limited to:
Contract Assets and Contract Liabilities
Contract assets represent the contract revenue recognized but not yet billed pursuant to contract terms.
Contract liabilities represent the billings to date, as allowed under the terms of a contract, but not yet recognized as contract revenue using our revenue recognition policy.
Investments in Unconsolidated Joint Ventures
We have noncontrolling interests in joint ventures accounted for under the equity method. Fees received for and the associated costs of services performed by us and billed to joint ventures with respect to work done by us for third-party customers are recorded as our revenues and costs in the period in which such services are rendered. In certain joint ventures, a fee is added to the respective billings from both us and the other joint venture partners on the amounts billed to the third-party customers. These fees result in earnings to the joint venture and are split with each of the joint venture partners and paid to the joint venture partners upon collection from the third-party customer. We record our allocated share of these fees as equity in earnings of joint ventures.
Additionally, our ACAP segment primarily invests in real estate projects.
Goodwill and Acquired Intangible Assets
Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition. In order to determine the amount of goodwill resulting from an acquisition, we perform an assessment to determine the value of the acquired company’s tangible and identifiable intangible assets and liabilities. In our assessment, we determine whether identifiable intangible assets exist, which typically include backlog and customer relationships.
We test goodwill for impairment annually for each reporting unit in the beginning of the fourth quarter of the fiscal year and between annual tests, if events occur or circumstances change which suggest that goodwill should be evaluated. Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors. A reporting unit is defined as an operating segment or one level below an operating segment. Our impairment tests are performed at the operating segment level as they represent our reporting units.
Goodwill is evaluated for impairment either by assessing qualitative factors or by performing a quantitative assessment. Qualitative factors, such as overall financial performance, industry or market considerations, or other relevant events, are assessed to determine if it is more likely than not that the fair value of the reporting units is less than their carrying amounts. During a quantitative impairment test, we estimate the fair value of the reporting unit using income and market approaches, and compare that amount to the carrying value of that reporting unit. In the event the fair value of the reporting unit is determined to be less than the carrying value, goodwill is impaired, and an impairment loss is recognized equal to the excess, limited to the total amount of goodwill allocated to the reporting unit.
The impairment evaluation process includes, among other things, making assumptions about variables such as revenue growth rates, profitability, discount rates, and industry market multiples, which are subject to a high degree of judgment.
There are inherent uncertainties related to each of the above listed assumptions, and our judgment in applying them. Changes in the assumptions used in our goodwill and intangible assets could result in impairment charges that could be material to our consolidated financial statements in any given period. We have not materially changed our estimation methodology during the periods presented.
Pension Benefit Obligations
A number of assumptions are necessary to determine our pension liabilities and net periodic costs. These liabilities and net periodic costs are sensitive to changes in those assumptions. The assumptions include discount rates, long-term rates of return on plan assets and inflation levels limited to the United Kingdom and are generally determined based on the current economic environment in each host country at the end of each respective annual reporting period. We evaluate the funded status of each of our retirement plans using these current assumptions and determine the appropriate funding level considering applicable regulatory requirements, tax deductibility, reporting considerations and other factors. Based upon current assumptions, we expect to contribute $24.2 million to our international plans in fiscal 2025. Our required minimum contributions for our U.S. qualified plans are not significant. In addition, we may make additional discretionary contributions. We currently expect to contribute $11.2 million to our U.S. plans (including benefit payments to nonqualified plans and postretirement medical plans) in fiscal 2025. If the discount rate was reduced by 25 basis points, plan liabilities would increase by approximately $30.7 million. If the discount rate and return on plan assets were reduced by 25 basis points, plan expense would decrease by approximately $0.4 million and increase by approximately $2.8 million, respectively. If inflation increased by 25 basis points, plan liabilities in the United Kingdom would increase by approximately $15.1 million and plan expense would increase by approximately $0.9 million.
At each measurement date, all assumptions are reviewed and adjusted as appropriate. With respect to establishing the return on assets assumption, we consider the long-term capital market expectations for each asset class held as an investment by the various pension plans. In addition to expected returns for each asset class, we take into account standard deviation of returns and correlation between asset classes. This is necessary in order to generate a distribution of possible returns which reflects diversification of assets. Based on this information, a distribution of possible returns is generated based on the plan’s target asset allocation.
Capital market expectations for determining the long-term rate of return on assets are based on forward-looking assumptions which reflect a 20-year view of the capital markets. In establishing those capital market assumptions and expectations, we rely on the assistance of our actuaries and our investment consultants. We and the plan trustees review whether changes to the various plans’ target asset allocations are appropriate. A change in the plans’ target asset allocations would likely result in a change in the expected return on asset assumptions. In assessing a plan’s asset allocation strategy, we and the plan trustees consider factors such as the structure of the plan’s liabilities, the plan’s funded status, and the impact of the asset allocation to the volatility of the plan’s funded status, so that the overall risk level resulting from our defined benefit plans is appropriate within our risk management strategy.
Between September 30, 2023 and September 30, 2024, the aggregate worldwide pension deficit decreased from $165.3 million to $134.0 million due to an increase in the actual return on plan assets partially offset by decreased discount rates. If the various plans do not experience future investment gains to reduce this shortfall, the deficit will be reduced by additional contributions.
RevenueThe portion of revenue excluding pass-through revenues attributable to subcontractors increased for the year ended September 30, 2025. Underlying revenue excluding pass-through revenues increased across most of our end markets as a result of increased investment by large, publicly financed, global infrastructure programs including the Infrastructure Investment and Jobs Act in the U.S. and similar large programs in our largest end markets globally. Our Water end market has been benefiting from increased investment to address drought, flooding, emerging containment remediation, water storage, and clean and safe drinking water scarcity.water. Our Transportation end market has been benefitting from incremental surface and transit investments across the globe,globe to modernize transportation infrastructure and address growth and urbanization trends, while our Environment end market has been benefiting from infrastructure that requires permitting and compliance, and remediation as well as investments in energy. Our Facilities end market has been benefiting from positive public sector investment, trends in asset maintenance and repositioning andas well as demand for modern, efficient facilities. The quantification of the impact of these trends by end market is noted within our Americas and International reportable segments discussion below, where applicable, and represents substantially all of our revenue change.
Our cost of revenue increaseddecreased to $15,021.2$14,922.9 million for the year ended September 30, 20242025 compared to $13,433.0$15,021.2 million for the corresponding period last year, ana increasedecrease of $1,588.2$98.3 million, or 11.8%.0.7%.
Equity in Earnings (Losses) of Joint Ventures
Our equity in earnings of joint ventures for the year ended September 30, 20242025 was $2.1$27.0 million as compared to equity in loss of $279.4$2.1 million in the corresponding period last year.
The increase in equity in earnings of joint ventures for the year ended September 30, 20242025 compared to the same period in the prior year was primarily due to impairment losses recorded by our AECOM Capital segment in fiscal 20232024 that did not repeat to the same extent in fiscal 2024.2025.
Our general and administrative expenses for the year ended September 30, 20242025 increaseddecreased $6.5$2.3 million, or 4.2%,1.4%, to $160.1$157.8 million as compared to $153.6$160.1 million for the corresponding period last year. For the year ended September 30, 2024,2025, general and administrative expenses as a percentage of revenue decreased to 1.0%0.9% from 1.1%1.0% for the corresponding period last year.
The decrease in general and administrative expenses for the year ended September 30, 2025 was primarily due to ongoing efforts to drive efficiencies and streamline operations.
Restructuring and Acquisition Costs
Restructuring and acquisition costs are comprised of personnel costs, real estate costs, and costs associated with business acquisitions and exits. During the fiscal year ended September 30, 2025, we incurred total restructuring expenses of $59.4 million primarily related to actions taken for acquisitions and optimizing our organization structure. During fiscal year ended September 30, 2024, we incurred total restructuring expenses of $98.9 million primarily related to costs incurred to continue to align our real estate portfolio with our employee flexibility initiatives, continue our exit of certain countries in Southeast Asia, drive support function efficiency, and reduce our risk profile. During fiscal year ended September 30, 2023, we incurred total restructuring expenses of $188.4 million, primarily related to actions taken to align our real estate portfolio with our employee flexibility initiatives and costs incurred in preparation for the exit of specific countries in Southeast Asia.
Our other income for the year ended September 30, 20242025 increaseddecreased to $17.6$10.5 million from $8.3$17.6 million for the corresponding period last year.
The increasedecrease in other income for the year ended September 30, 20242025 was primarily due to the increasedecrease in fair value of our investments measured at fair value.
The increasedecrease in interest expense for the year ended September 30, 20242025 was primarily due to an increase in our debt as well as $7.6 million inadditional financing charges recorded in fiscal 2024 related to the New Credit Facilities, defined below.below, that did not repeat in the current fiscal year.
Our income tax expense for the year ended September 30, 20242025 was $152.9$204.0 million compared to $56.1$152.9 million for the year ended September 30, 2023.2024. The increase in tax expense for the current period compared to the corresponding period last year was due primarily to the tax impact of an increase in pre-tax income of $504.8$197.4 million, an increase in tax benefitexpense of $29.2$28.1 million related to changes in valuationuncertain allowances,tax positions, an increase in tax expense of $24.6 million related to state income taxes, a reduction in tax expense of $20.2 million related to the sale of ACAP investments,investments in fiscal 2024, and a decrease in tax expensebenefit of $15.6$20.1 million related to foreigndeferred residualtax income,assets anrecognized increasedue to legal entity restructuring implemented in taxfiscal expense of $10.0 million related to nondeductible costs, and an increase in tax expense of $9.1 million related to uncertain tax positions.2025.
During fiscal 2025, we recorded a reserve of $47.0 million related to uncertain tax positions associated with federal and state tax credits claimed for years subject to examination by the tax authorities. The reserve reflects our assessment that it is more likely than not that a portion of the credits may not be sustained under examination based on recent discussions and developments related to our ongoing audits.
During fiscal 2025, we recognized deferred tax assets of $20.1 million related to legal entity restructuring. The restructuring resulted in the recognition of deferred tax assets related to tax attributes that are expected to be utilized against future taxable income.
During fiscal 2024, we approved a tax planning strategy and restructured certain operations in Canada which resulted in a release of a valuation allowance related to net operating losses and other deferred tax assets of $11.7 million. We are now forecasting the utilization of the net operating losses within the foreseeable future. The positive evidence was evaluated against any negative evidence to determine the valuation allowance was no longer needed.
During fiscal 2022, valuation allowances in the amount of $21.9 million primarily related to net operating losses in certain foreign entities were released due to sufficient positive evidence. The positive evidence included a realignment of our global transfer pricing methodology which resulted in forecasting the utilization of the net operating losses within the foreseeable future.
The OECD has introduced the Base Erosion and Profit Shifting (BEPS) 2.0 framework which includes Pillar 2. Pillar 2 introduces a 15% global minimum tax for large multinational enterprises in each of the jurisdictions that they operate. Many countries have enacted the Pillar 2 global minimum tax regime including some countries where we operate. The implementation of Pillar 2 will affect our financial statements beginning October 1, 2024. Based on our current analysis, we dodoes not expect the implementation of Pillar 2 to have a material impact on our consolidated financial statements.statements for fiscal 2025. The company is actively monitoring developments related to Pillar 2 and will continue to assess the potential impact.
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act which permanently extends many provisions of the Tax Cuts and Jobs Act of 2017 and introduces new tax provisions relevant for multinational businesses. Most of the new provisions take effect starting in fiscal 2026. Based on our assessment, we do not expect the legislation to have a material impact on our consolidated financial statements.
We are currently under tax audit in several jurisdictions including the U.S. where our federal income tax returns for fiscal 2017 through 2020 are being examined by the IRS. Disputes can arise with tax authorities involving issues related to the timing of deductions, the calculation and use of credits, and the taxation of income in various tax jurisdictions because of differing interpretations or application of tax laws, regulations, and relevant facts. The IRS is currently auditing certain tax credits and the methodology for calculating the credits. WhileWe wewill have historically been ablecontinue to sustainmonitor thedevelopments credits in previous audit cycles without adjustment, we believe it’s reasonably possible there could be an adjustmentrelated to the liabilityexamination forand uncertainwill tax positions withinadjust the nextreserve twelveas monthsnecessary relatedbased toon thischanges matter.in However,facts givenand circumstances, including the early stagesresolution of the audit of these credits, we are not able to reasonably estimate the range of potential outcomes.audit.
Net loss from discontinued operations was $75.4 million for the year ended September 30, 2025 compared to $105.0 million for the year ended September 30, 2024, a decrease of $29.6 million.
Net loss from discontinued operations was $105.0 million for the year ended September 30, 2024 and net loss was $57.2 million for the year ended September 30, 2023, an increase of $47.8 million. The increasedecrease in net loss from discontinued operations for the year ended September 30, 20242025 was primarily due to revisionsthe settlement of estimated contingent consideration related to the sale of our civil infrastructure construction business in fiscal 2024 that did not occur to the same extentrecur in fiscal 2023.2025 partially offset by a revision to estimated recoveries on a refinery turnaround project resulting from unfavorable court orders that occurred in fiscal 2025.
Americas
ThePass-through increaserevenues inon revenuecontracts for thewhich year ended September 30, 2024 was driven by organic growth and an increase in pass-through revenues of $1,224.4 million due to a higher proportion of contracts requiring us towe subcontract work on behalf of our clients anddecreased revenue$307.4 million for the year ended September 30, 2025 compared to the corresponding period last year. Revenue from increased project activity in the Americas,Americas includingincluded growth in our Transportation end market of $224.2$261.1 million, or 11.2%,11.7%, and our Water and Environment end markets of $194.8$127.4 million, or 10.1%,6.0%, offset by a decrease in our Facilities end market of $344.7 million, or 4.3%, compared to the corresponding period last year, which have benefited from the end market trends discussed in the consolidated revenue section above.year.
Cost of revenue for our Americas segment for the year ended September 30, 20242025 increaseddecreased by $1,450.6$82.8 million, or 14.1%,0.7%, to $11,726.6$11,643.8 million compared to $10,276.0$11,726.6 million for the corresponding period last year.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors as disclosed in Part I, Item 1A, Risk Factors in our most recent Annual Report on Form 10-K.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
Net cash provided by operating activities wassee in full comparison$74.0$169.2 million for thesixnine months endedMarchJune31,30, 2026 as compared to$341.7$625.5 million for thesixnine months endedMarchJune31,30, 2025. The change was primarily attributable to an increase in net cash outflow of $283.5 million for the nine months ended June 30, 2026 related to two Construction Management projects compared to the corresponding period in the prior year, partially offset by a $51.1 million cash collection on a refinery turnaround project. The change in net cash flow from operations was also attributable to a decrease in net income of approximately$54.9$297.6 million,which was impacted by a longer than anticipated claims resolution process,and an increase in cash used by changes in working capital of$282.1$179.3 million, partially offset by an increase in adjustments for non-cash items of approximately$69.3$20.6 million. The sale of trade receivables to financial institutions included in operating cash flows decreased$13.6$10.1 million during thesixnine months endedMarchJune31,30, 2026 compared to thesixnine months endedMarchJune31,30, 2025. We expect to continue to sell trade receivables in the future as long as the terms continue to remain favorable to us.
Our income taxsee in full comparisonexpensebenefit for the three months endedMarchJune31,30, 2026 was$27.0$26.6 million as compared to$51.2income tax expense of $65.1 million in the corresponding period last year. The decrease in tax expense for the current period compared to the corresponding period last year was due primarily toathe taxbenefitimpact of$54.7a decrease in pre-tax income of $375.4 million and a decrease in tax expense of $18.0 million related todeferredstatetaxincomeassets recognized due to legal entity restructuring implemented in the second quarter of fiscal 2026 and tax expense of $34.4 million related to changes in uncertain tax positions.taxes.
“During the second quarter of fiscal 2026, we recognized a net deferred tax asset of $54.7 million related to legal entity restructuring. The restructuring resulted in the recognition of a deferred tax asset related to tax attributes that are expected to be utilized against future taxable income.”see in full comparison
Thesee in full comparisonincreasechanges in gross profit and gross profit as a percentage of revenue for the three andsixnine months endedMarchJune31,30, 2026 was primarily due to thebenefit$336.8frommillionrestructuringlossactionsrecordedtakenonlastayear,ConstructiongrowthManagement project inenterprisethecapabilitythirdcenters,quarterongoingofcontinuousfiscalimprovement initiatives, and growth in higher margin advisory services.2026.
Thesee in full comparisonincreasedecrease in net loss from discontinued operations for thesixthree months endedMarchJune31,30, 2026 was primarily due to achangerevisionintoourestimatedexpected recoveryrecoveries on adeactivation,refinerydemolition,turnand removalaround project in thefirstpriorquarteryearofthat did not recur in the current year.
“The decreases in gross profit and gross profit as a percentage of revenue for the three months ended March 31, 2026 were primarily due to decreases in Asia and the Middle East, which were partially offset by increases in Europe and Australia.”see in full comparison
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This Quarterly Report contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect the Company’s current beliefs, expectations or intentions regarding future events. These statements include forward-looking statements with respect to the Company, including the Company’s business, operations and strategy, and infrastructure consulting industry. Statements that are not historical facts, without limitation, including statements that use terms such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “may,” “plans,” “potential,” “projects,” and “will” and that relate to our future revenues, expenditures and business trends; future reduction of our self-perform at-risk construction exposure; future accounting estimates; future contractual performance obligations; future conversions of backlog; future capital allocation priorities, including common stock repurchases, future trade receivables, future debt pay downs; future post-retirement expenses; future tax benefits and expenses, and the impact of future tax laws; future compliance with regulations; future legal claims and insurance coverage; future effectiveness of our disclosure and internal controls over financial reporting; future costs savings; and other future economic and industry conditions, are forward-looking statements. In light of the risks and uncertainties inherent in all forward-looking statements, the inclusion of such statements in this Quarterly Report should not be considered as a representation by us or any other person that our objectives or plans will be achieved. Although management believes that the assumptions underlying the forward-looking statements are reasonable, these assumptions and the forward-looking statements are subject to various factors, risks and uncertainties, many of which are beyond our control, including, but not limited to, our business is cyclical and vulnerable to economic downturns and client spending reductions; government shutdowns; changes in administration or other funding directives and circumstances that cause governmental agencies to modify, curtail or terminate our contracts; government contracts are subject to audits and adjustments of contractual terms; long-term government contracts are subject to uncertainties related to government contract appropriations; losses under fixed-price contracts; our ability to successfully and timely perform our contractual obligations and to recover claims for additional contract costs; potential liquidated damages under our contracts; limited control over operations run through our joint venture entities; liability for misconduct by our employees or consultants; changes in government laws, regulations and policies, including failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; potential high leverage and inability to service our debt and guarantees; our capital allocation strategy, including our ability to continue payment of dividends and repurchase stock; exposure to political and economic risks in different countries, including tariffs and trade policies, geopolitical events, and conflicts; inflation, currency exchange rates and interest rate fluctuations; changes in capital markets and stock market volatility; retaining and recruiting key technical and management personnel; legal claims and litigation; inadequate insurance coverage; environmental law compliance and inadequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; managing pension costs; AECOM Capital’s real estate development; cybersecurity issues, IT outages and data privacy; risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction, and oil and gas construction businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and any future proceeds owed to us as part of the transactions could be lower than we expect; risks associated with our strategic initiatives, including AI investments and potential acquisitions and divestitures, as well as other additional risks and factors discussed in this Quarterly Report on Form 10‑Q and any subsequent reports we file with the SEC. Accordingly, actual results could differ materially from those contemplated by any forward-looking statement.
•Americas: Planning, advisory, consulting, architectural and engineering design, construction management and program management services to public and private clients in the United States, Canada, and Latin America in major end markets such as transportation, water, government, facilities, environmental, and energy. As previously announced, the strategic review of our construction management business has been completed, and we intend to continue to own and operate the business.
At MarchJune 31,30, 2026, we had approximately $884 million remaining of the Board’s stock repurchase authorization. On February 4, 2026, the Board approved an increase in our stock repurchase authorization to $1.0 billion. We intend to deploy future available cash towards dividends and stock repurchases consistent with our returns driven capital allocation policy.
There were two business acquisitions consummated during the year ended September 30, 2025. The Company accounted for these acquisitions as business combinations and preliminarily estimated the amount of identifiable assets and the results of operations of the acquired companies have been included in our consolidated results since the dates of acquisition. Those results of operations were not material to our consolidated results. The initial accounting for these acquisitions is not complete as of MarchJune 31,30, 2026 as the Company continues to assess the value of the tax liabilities and the acquired intellectual property, including digital assets.
Our Construction Management business has two projects that have experienced delays resulting in an increase in the estimated cost to complete and have significant claims for recovery of damages. We continue to actively work with the two project owners to resolve our claims position and exposure. While progress on resolving our claims position has been slower than anticipated, our initial successes in resolving disputed items favorably give us confidence in our ability to recover these claims. However, any further significant delay in the collection of our claims could constrain our capital allocation strategy with respect to the timing of stock repurchases. Our assumptions on the resolution of our claims from the clients, subcontractors, and insurers are subject to uncertainty, and changes in those assumptions could result in a material impact on our results of operations or cash flows.
On one of the Construction Management projects discussed above, we assessed the estimated cost to complete the project compared to the estimated revenue with the relevant components of variable consideration, including significant claims that represent a portion of the significant claims discussed in Note 4, Revenue Recognition, and recorded an aggregate loss of $336.8 million on the project. We continually monitor the progress on the project and the loss represents our current estimate based on available information. We may be required to make subsequent changes to estimates based on new information and project progression, which could result in additional estimated losses and could be material.
Three and sixnine months ended MarchJune 31,30, 2026 compared to the three and sixnine months ended MarchJune 31,30, 2025
Our revenue for the three months ended MarchJune 31,30, 2026 increaseddecreased $29.6$592.4 million, or 0.8%,14.2%, to $3,801.2$3,586.0 million as compared to $3,771.6$4,178.4 million for the corresponding period last year.
Our revenue for the sixnine months ended MarchJune 31,30, 2026 decreased $153.8$746.2 million, or 2.0%,6.2%, to $7,632.0$11,218.0 million as compared to $7,785.8$11,964.2 million for the corresponding period last year.
The Company's portion of revenue excluding pass-through revenue attributable to subcontractors increased for both the three and six-monthnine-month periods ended MarchJune 31,30, 2026. Underlying revenue excluding pass-through revenues increased across most of our end markets as a result of increased investment by large, publicly financed, global programs with infrastructure incentive and spending including the Infrastructure Investment and Jobs Act and the One Big Beautiful Bill Act in the U.S. and similar large programs in our largest end markets globally. For example, in Canada, the federal government is helping drive infrastructure investment with its Major Projects Office and launching a Sovereign Wealth Fund. In the United Kingdom, infrastructure investment is backed by the 10 Year Infrastructure Strategy with £725 billion in long-term funding. Additionally, a clear trend emerging globally across our markets is the rapid acceleration in national defense spending, and this is contributing to our revenue growth as well as driving growth in our backlog and pipeline of opportunities. We are benefiting from the rapid growth in the energy and high-tech sectors driven by robust demand from population and economic growth, widespread electrification, and rapid data center development. Our Water end market has been benefiting from increased investment to address drought, flooding, emerging contaminant remediation, water storage, and clean and safe drinking water. Our Transportation end market has been benefiting from incremental investments across the globe to modernize transportation infrastructure and address growth and urbanization trends, while our Environment end market has been benefiting from infrastructure that requires permitting, compliance, and remediation as well as investments in energy. Our Facilities end market has been benefiting from positive public sector investment, trends in asset maintenance and repositioning as well as demand for modern, efficient facilities. The quantification of the impact of these trends by end market is noted within our Americas and International reportable segments discussion below, where applicable, and represents substantially all of our revenue change.
In the course of providing our services, we routinely subcontract for services and incur other direct costs on behalf of our clients. These costs are passed through to clients and, in accordance with industry practice and GAAP, are included in our revenue and cost of revenue. Because these pass-through revenues can change significantly from project to project and period to period, changes in revenue may not be indicative of business trends. Pass-through revenues for the three-month periods ended MarchJune 31,30, 2026 and 2025 were $1.9$2.0 billion and $1.9$2.2 billion, respectively. Pass-through revenue as a percentage of total revenue was 49%55% and 50%54% during the three months ended MarchJune 31,30, 2026 and 2025, respectively. Pass-through revenues for the six-monthnine-month periods ended MarchJune 31,30, 2026 and 2025 were $3.8$5.8 billion and $4.1$6.4 billion, respectively. Pass-through revenue as a percentage of total revenue was 50%52% and 53% during the sixnine months ended MarchJune 31,30, 2026 and 2025, respectively.
Our cost of revenue increaseddecreased to $3,504.7$3,620.1 million for the three months ended MarchJune 31,30, 2026 compared to $3,480.8$3,851.5 million for the corresponding period last year, ana increasedecrease of $23.9$231.4 million, or 0.7%.6.0%.
Our cost of revenue decreased to $7,054.5$10,674.6 million for the sixnine months ended MarchJune 31,30, 2026 compared to $7,226.6$11,078.1 million for the corresponding period last year, a decrease of $172.1$403.5 million, or 2.4%.3.6%.
Substantially all of the change in our cost of revenue for the three and sixnine months ended MarchJune 31,30, 2026 occurred in our Americas and International reportable segments, which is discussed in more detail below.
Gross (Loss) Profit
Our gross profit for the three months ended MarchJune 31,30, 2026 increaseddecreased $5.7$361.0 million, or 2.0%,110.4%, to $296.5a loss of $34.1 million as compared to $290.8profit of $326.9 million for the corresponding period last year. For the three months ended MarchJune 31,30, 2026, gross profit, as a percentage of revenue, increaseddecreased to 7.8%(0.9)% from 7.7%7.8% in the corresponding period last year.
Our gross profit for the sixnine months ended MarchJune 31,30, 2026 increaseddecreased $18.3$342.7 million, or 3.3%,38.7%, to $577.5$543.4 million as compared to $559.2$886.1 million for the corresponding period last year. For the sixnine months ended MarchJune 31,30, 2026, gross profit, as a percentage of revenue, increaseddecreased to 7.6%4.8% from 7.2%7.4% in the corresponding period last year.
Our equity in earnings of joint ventures for the three months ended MarchJune 31,30, 2026 was $9.1$4.6 million as compared to $6.8$5.3 million in the corresponding period last year.
Our equity in earnings of joint ventures for the sixnine months ended MarchJune 31,30, 2026 was $18.9$23.5 million as compared to $16.4$21.7 million in the corresponding period last year.
The increasesdecrease in equity in earnings of joint ventures for the three and six months ended MarchJune 31,30, 2026 as compared to the periodsperiod in the prior year was primarily due to a decrease in earnings in Europe. The increase in equity in earnings of joint ventures for the nine months ended June 30, 2026 as compared to the period in the prior year was primarily due to improved earnings in ourthe AECOM Capital segment.Americas.
Our general and administrative expenses for the three months ended March 31, 2026 increased $4.2 million, or 10.5%, to $44.2 million as compared to $40.0 million for the corresponding period last year. For the three months ended March 31, 2026, general and administrative expenses, as a percentage of revenue, was 1.1% which was consistent with the corresponding period last year.
Our general and administrative expenses for the sixthree months ended MarchJune 31,30, 2026 increaseddecreased $4.6$3.8 million, or 5.7%,9.9%, to $85.1$34.4 million,million as compared to $80.5$38.2 million for the corresponding period last year. For the sixthree months ended MarchJune 31,30, 2026, general and administrative expenses, as a percentage of revenue, increased to 1.1%1.0% as compared to 1.0%0.9% in the corresponding period last year.
Our general and administrative expenses for the nine months ended June 30, 2026 increased $0.8 million, or 0.7%, to $119.5 million, as compared to $118.7 million for the corresponding period last year. For the nine months ended June 30, 2026, general and administrative expenses, as a percentage of revenue, was 1.0% which was consistent with the corresponding period last year.
The increasesdecreases in general and administrative expenses for the three and six months ended MarchJune 31,30, 2026 werewas consistent with the increasesdue to revenuea and$18.2 primarilymillion representeddecrease in share-based payment expense due to changes in performance achievement expectations partially offset by increased investments in technology.
Restructuring and acquisition costs are comprised of personnel costs, real estate costs, and costs associated with optimizing our organizational structure that position us for broader deployment of AI and technology tools to drive efficiencies. During the three and sixnine months ended MarchJune 31,30, 2026, we incurred total restructuring and acquisition costs of $13.6$12.1 million and $41.5$53.6 million, respectively, primarily related to actions taken for acquisitions and optimizing our organization structure. No new restructuring costs were incurred during the three and sixnine months ended MarchJune 31,30, 2025.
Our other income for the three months ended MarchJune 31,30, 2026 was $10.5$5.1 million compared to a loss of $8.7$0.8 million for the corresponding period last year.
Our other income for the sixnine months ended MarchJune 31,30, 2026 was $18.4$23.5 million compared to a loss of $1.8$1.0 million for the corresponding period last year.
The increases in other income for the three and sixnine months ended MarchJune 31,30, 2026 was primarily due to the increasesgains in fair values of our investments measured at fair value.value of $2.2 million and $15.2 million for the three and nine months ended June 30, 2026, respectively, compared to losses of $1.3 million and $6.9 million for the three and nine ended June 30, 2025, respectively.
Our interest income for the three months ended MarchJune 31,30, 2026 decreased $0.7$2.1 million to $13.8$12.0 million from $14.5$14.1 million for the corresponding period last year.
Our interest income for the sixnine months ended MarchJune 31,30, 2026 decreased $3.6$5.7 million to $27.5$39.5 million from $31.1$45.2 million for the corresponding period last year.
The decrease in interest income for the three and sixnine months ended MarchJune 31,30, 2026 was primarily due to a decrease in our interest-bearing assets.
Our interest expense for the three months ended MarchJune 31,30, 2026 was $50.5$47.7 million as compared to $42.3$40.1 million for the corresponding period last year.
Our interest expense for the sixnine months ended MarchJune 31,30, 2026 was $95.8$143.5 million as compared to $85.3$125.4 million for the corresponding period last year.
The increase in interest expense for the three and sixnine months ended MarchJune 31,30, 2026 was primarily due to an increase in our interest-bearing liabilities.
Income Tax (Benefit) Expense
Our income tax expensebenefit for the three months ended MarchJune 31,30, 2026 was $27.0$26.6 million as compared to $51.2income tax expense of $65.1 million in the corresponding period last year. The decrease in tax expense for the current period compared to the corresponding period last year was due primarily to athe tax benefitimpact of $54.7a decrease in pre-tax income of $375.4 million and a decrease in tax expense of $18.0 million related to deferredstate taxincome assets recognized due to legal entity restructuring implemented in the second quarter of fiscal 2026 and tax expense of $34.4 million related to changes in uncertain tax positions.taxes.
Our income tax expense for the sixnine months ended MarchJune 31,30, 2026 was $66.0$39.4 million as compared to $80.5$145.6 million in the corresponding period last year. The decrease in tax expense for the current period compared to the corresponding period last year was due primarily to the tax impact of a decrease in pre-tax income of $394.6 million, a deferred tax benefit of $54.7 million related to deferred tax assetsattributes recognizedthat dueare expected to be utilized in the future that resulted from legal entity restructuring implemented in the second quarter of fiscal 2026, a decrease in tax expense of $6.1 million related to state income taxes, and a decrease in tax expense of $4.3$24.1 million related to foreignstate residualincome income,taxes, partially offset by tax expense of $34.4$31.0 million related to changes in uncertain tax positions and a tax benefit of $20.1 million related to deferred tax assets recognized due to legal entity restructuring implemented in the first quarter of fiscal 2025.
During the second quarter of fiscal 2026, we recognized a net deferred tax asset of $54.7 million related to legal entity restructuring. The restructuring resulted in the recognition of a deferred tax asset related to tax attributes that are expected to be utilized against future taxable income.
Net loss from discontinued operations was $4.2$2.9 million for the three months ended MarchJune 31,30, 2026 compared to net loss of $10.3$43.9 million for the three months ended MarchJune 31,30, 2025, ana increasedecrease of $6.1$41.0 million.
Net loss from discontinued operations was $70.1$73.0 million for the sixnine months ended MarchJune 31,30, 2026 compared to a net loss of $19.9$63.8 million for the sixnine months ended MarchJune 31,30, 2025, an increase of $50.2$9.2 million.
The increasedecrease in net loss from discontinued operations for the sixthree months ended MarchJune 31,30, 2026 was primarily due to a changerevision into ourestimated expected recoveryrecoveries on a deactivation,refinery demolition,turn and removalaround project in the firstprior quarteryear ofthat did not recur in the current year.
The increase in net loss from discontinued operations for the nine months ended June 30, 2026 was primarily due to a change in our expected recovery on a deactivation, demolition, and removal project in the first quarter of the current year.
Net (Loss) Income Attributable to AECOM
The factors described above resulted in net loss attributable to AECOM of $86.7 million and net income attributable to AECOM of $179.9 million and $254.4$167.7 million for the three and sixnine months ended MarchJune 31,30, 2026, respectively, as compared to net income attributable to AECOM of $143.4$131.0 million and $310.4$441.4 million for the three and sixnine months ended MarchJune 31,30, 2025, respectively.
Revenue for our Americas segment for the three months ended MarchJune 31,30, 2026 increaseddecreased $14.9$644.5 million, or 0.5%,19.7%, to $2,911.6$2,632.7 million as compared to $2,896.7$3,277.2 million for the corresponding period last year.
Revenue increased despite a $54.8 million decrease in pass-through revenues on contracts for which we subcontract work on behalf of our clients compared to the corresponding period in the prior year. The increase in revenue from the Americas was primarily due to increased project activity in our Transportation end market of $69.6 million, or 11.6%, and an increase in our Water and Environment end markets of $47.9 million, or 9.0%, and was partially offset by our Facilities end market, which decreased $77.7 million, or 4.6%, compared to the corresponding period last year.
Revenues for our Americas segment for the six months ended March 31, 2026 decreased $119.8 million, or 2.0%, to $5,888.9 million as compared to $6,008.7 million for the corresponding period last year.
TheRevenue decrease in revenues was primarilydecreased due to a $253.2$473.0 million decrease in revenue on a Construction Management project for the three months ended June 30, 2026 compared to the corresponding period in the prior year. Revenue also decreased due to a $153.6 million decrease in pass-through revenues on contracts for which we subcontract work on behalf of our clients compared to the corresponding period in the prior year. The decrease in revenue wasfrom alsothe dueConstruction Management project contributed to a decrease in our Facilities end market, which decreased $268.8$486.0 million, or 7.4%, and was partially offset by increased project activity in our Transportation end market of $106.0 million, or 9.0%, and an increase in our Water and Environment end markets of $91.5 million, or 8.5%,24.1%, compared to the corresponding period last year. Our Water and Environment end markets decreased $99.9 million, or 17.3%, and our Transportation end market decreased $52.3 million, or 8.1%, compared to the corresponding period last year.
Revenues for our Americas segment for the nine months ended June 30, 2026 decreased $764.3 million, or 8.2%, to $8,521.6 million as compared to $9,285.9 million for the corresponding period last year.
The decrease in revenues was due to a $641.8 million decrease in revenue on a Construction Management project for the nine months ended June 30, 2026 compared to the corresponding period in the prior year and a $257.3 million decrease in pass-through revenues on contracts for which we subcontract work on behalf of our clients compared to the corresponding period in the prior year. The decrease in revenue from the Construction Management project contributed to a decrease in our Facilities end market, which decreased $754.6 million, or 13.4%. Our Water and Environment end markets decreased $11.8 million, or 0.7%, and was partially offset by increased project activity in our Transportation end market of $57.1 million, or 3.1%, compared to the corresponding period last year.
Cost of revenue for our Americas segment for the three months ended MarchJune 31,30, 2026 increaseddecreased by $4.3$262.6 million, or less than 1%,8.6% to $2,688.5$2,775.8 million compared to $2,684.2$3,038.4 million for the corresponding period last year.
Cost of revenue for our Americas segment for the sixnine months ended MarchJune 31,30, 2026 decreased by 149.8$412.4 million, or 2.7%,4.8%, to $5,456.2$8,232.0 million compared to $5,606.0$8,644.4 million for the corresponding period last year.
The decrease in cost of revenue for the sixnine months ended MarchJune 31,30, 2026 was primarily due to the decreases in subcontractor and other direct costs partially offset by increased project activity.
Gross (Loss) Profit
Gross profit for our Americas segment for the three months ended MarchJune 31,30, 2026 increaseddecreased $10.6$381.9 million, or 5.0%,159.9%, to $223.1a gross loss of $143.1 million as compared to $212.5gross profit of $238.8 million for the corresponding period last year. As a percentage of revenue, gross profitloss increasedwas to 7.7%5.4% of revenue for the three months ended MarchJune 31,30, 2026 from gross profit of 7.3% in the corresponding period last year.
Gross profit for our Americas segment for the sixnine months ended MarchJune 31,30, 2026 increaseddecreased $30.0$351.9 million, or 7.4%,54.9%, to $432.7$289.6 million as compared to $402.7$641.5 million for the corresponding period last year. As a percentage of revenue, gross profit increaseddecreased to 7.3%3.4% of revenue for the sixnine months ended MarchJune 31,30, 2026 from 6.7%6.9% in the corresponding period last year.
The increasechanges in gross profit and gross profit as a percentage of revenue for the three and sixnine months ended MarchJune 31,30, 2026 was primarily due to the benefit$336.8 frommillion restructuringloss actionsrecorded takenon lasta year,Construction growthManagement project in enterprisethe capabilitythird centers,quarter ongoingof continuousfiscal improvement initiatives, and growth in higher margin advisory services.2026.
Revenue for our International segment for the three months ended MarchJune 31,30, 2026 increased $14.8$52.0 million, or 1.7%,5.8%, to $889.6$953.1 million as compared to $874.8$901.1 million for the corresponding period last year.
The increase in revenue for the three months ended MarchJune 31,30, 2026 was benefitted by an increase in pass-through revenues of $3.0$10.0 million, compared to the corresponding period in the prior year. Revenue increased in our Facilities end market by $9.4$40.2 million, or 2.6%,11.4%, in our Energy end market by $15.3 million, or 55.7%, and in Waterour and EnvironmentTransportation end marketsmarket ofby $10.9$6.9 million, or 5.5%,3.3%, partially offset by a decrease in our TransportationWater and Environment end marketmarkets byof $18.8$10.6 million, or 6.6%,3.4%, compared to the corresponding period last year.
Revenue in our International segment for the sixnine months ended MarchJune 31,30, 2026 decreasedincreased $33.7$18.3 million, or 1.9%,0.7%, to $1,743.1$2,696.2 million as compared to $1,776.8$2,677.9 million for the corresponding period last year.
ACM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 3 Form 4 filings (3 insiders, 2 trade dates, 9,869 shares, about $699.4K) and open-market sales in 0 filings. Net open-market shares: 9,869 (purchases minus sales); net value about $699.4K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-16 | Poloni Lara |
Open-market purchase | 4,224 | $70.63 | $298.3K |
| 2026-05-14 | Kapoor Gaurav |
Open-market purchase | 1,420 | $71.12 | $101.0K |
| 2026-05-14 | Rudd Troy |
Open-market purchase | 4,225 | $71.02 | $300.1K |
Well-known investors holding ACM (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| PRIMECAP Management | 2026-06-30 | 8,787,043 | $613.3M | 0.36% | Added 2% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,795,383 | $124.0M | 0.04% | Added 69% |
| D. E. Shaw & Co. | 2026-06-30 | 1,711,157 | $119.4M | 0.07% | Added 61% |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,321,296 | $92.2M | 0.06% | Added 69% |
| Two Sigma Investments | 2026-06-30 | 875,607 | $61.1M | 0.05% | Added 73% |
| Renaissance Technologies | 2026-06-30 | 746,877 | $52.1M | 0.07% | Added 13% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 677,771 | $47.3M | 0.03% | Reduced 5% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 454,550 | $31.7M | 0.07% | Added 237% |
| Bridgewater Associates | 2026-06-30 | 163,405 | $11.4M | 0.05% | Reduced 11% |